Post-open Review

Same level’s test launches the same reaction down.

The pattern plays out again — early test of the 2168.00 area, big reaction down. It’s playing out faster and faster. Will its next recovery stage play out faster, too?

Restrained optimism of the overnight flat-to-higher ranging had at least kept the door open to a morning rally. But there was no print above the first minute’s high. And the first minute’s high only touched the 2169.25 overnight high, testing the 2169.00 bias-up signal. Holding its test through 10:15 put into play an offsetting test of the 2158.00 bias-down signal. Which has already been met to within 1 tick.

Restrained optimism, meet impatient selling. Potentially bullish from a contrarian perspective. Meanwhile, quite a bit of negative sentiment has been expressed already before this afternoon’s FOMC policy statement. Defensive posturing? Isn’t the Fed about to announce no rate hike again?

If the past week’s pattern is actually speeding up, then its recovery leg won’t wait until tomorrow. It might not wait for the afternoon’s news. Meanwhile, oversold RSIs at the low require a retest, although not necessarily before a recovery leg.

Opening surge only threatens bias-up.

“Unleashing the pent-up buying pressure at the open should surge through the 2165.00 overnight highs if this morning intends to recover.” That summarized what I had noted during the pre-open Tour, that the bullish template would surge quickly.

A post-open dip to 2162.75 and a break above 2164.75 each helped to confirm momentum was extending higher. Ultimately, 2168.00 was touched.

The open did exactly that, and then it didn’t. Bias-up didn’t trigger, despite probing 2 points above its 2166.00 signal. Instead, this is a no-bias environment. And having held a test of the 2157.75 bias-up signal, an offsetting test of the bias-down signal is in-play.

No-bias trending would probe above the bias-up signal during a no-bias environment, and then fail. The 2171.25 and 2175.50 attractions above don’t require testing, but they’re nearby. Back above 2166.50 would be credible for no-bias trending to probe fresh highs. Before failing.

Meanwhile, an offsetting test of the 2158.00 bias-down signal is in-play. Its test is likely underway back under 2164.25 (being tested now). Overbought RSIs at the high don’t require a retest, having developed during the open, regardless of their retest being likely at some point.

Selling satisfied, not rejected.

If this morning were to be about backing-and-filling this morning, instead of about retesting overnight highs, then its start was likelier to be aggressive.

And it was. The 2163.75 overnight low was retested during the first 5 minutes. And a downtrending channel formed through the opening 15 minutes.

Breaking lower fulfilled the 2158.00 bias-down target at 10:15, just as the 2163.75 bias-down signal was triggering. There’s no grace period for renewing the signal, so this is a bias-down environment whose target has been met.

Simultaneously oversold 1-minute and 3-minute RSIs at the low require its retest, potentially down to 2156.00 without signaling a deeper drop underway. Back above 2161.50 at any time would start to signal momentum already reversing up.

2158.00 represents the same area as last Tuesday’s session-long quicksand struggle. So, exiting the bias environment in rally mode may be necessary to avoid a deeper drop. And the reward may be to retest overnight highs already today.

Choppy open makes path up available.

The pre-open reaction down from the 2164.50 overnight high had held several tests of 2160.00. Post-open action slid immediately to 2157.25.

3-4 more 3-4 point swings and 45 minutes later, price action was still holding 2160.00 resistance. Three of the first hour’s five 15-minute checkpoints had overlapped the same relevant level — yesterday’s 2158.50 cash session close — signaling a ‘dry cleaners morning.”

While trending is unlikely, there’s a lot of room for noise. Especially back up to the 2164.50 overnight high, or 1 point higher just to touch the bias-up signal. An interim attraction at 2163.00 is being tested now, and might be an obstacle.

Gravitating up remains likely so long as 2160.00 holds as support. Probing even higher into the afternoon still has potential to test 2171.25. And a test of 2171.25 still has a likelihood for reacting back down sharply.

Choppy open is threatening to range narrowly..

Tuesday’s gap down resolved by not resolving, and just chopping around until the final minutes. Tiday’s gap down is shallower, but it’s under yesterday afternoon’s lows, and it hasn’t yet resolved.

Today’s resolution might not end very far from its open. But an intraday probe above yesterday’s high is likely since the 2164.25 bias-down signal held its test through 10:15. An offsetting test of the 2171.25 bias-up signal is in-play.

Today’s resolution might end very far into negative territory. Not confirming yesterday’s breakout by a second consecutive higher close, should instead trend down intraday.

The open has only fluctuated around yesterday afternoon’s 2166.50 lows. That lower-end held while its range attacked 2171.25. Attacking 2175.25 from this level should be no less likely.

\Meanwhile, there is not much of a requirement to probe higher, but that’s the likely scenario so long as sellers don’t gain traction.