Post-open Review
Post-open Review… Unwinding down.
Pre-open dive extends post-open.
The pre-open drop from 2086.00 to 2077.00 had firmed up to 2080.50. That’s this morning’s bias-up signal, and it was tested post-open, but not triggered at 10:15. Yellen’s opening remarks reiterated a rate-hike mentality, as expected.
So, this is a no-bias environment, its objective being an offsetting test of the 2070.75 bias-down signal. An offsetting test of the 2063.75 bias-down target would be in-play, too, had the 2086.00 bias-up target been touched post-open.
Meanwhile, bounces are likely to fail. And bounces are likely, as anxiousness breeds volatility during the first hour of Yellen’s Senate testimony. Its influences wanes significantly after that.
Post-open Review… Keep it coming (for now).
Overnight rally extends post-open.
It could have gone either way. It usually goes the other way. Otherwise, it goes this way.
Not every setup has a binary resolution that will trend in one direction, or the other. But often a single-minded, relentless overnight trend will reverse at the open. Not reversing tends instead to extend the trend almost as relentlessly. A third option is very unlikely.
This morning’s choice was to extend.
So, having pulled back already from 2087.50 to 2083.00, post-open action surged through its 2085.25 buy signal to probe a fresh high. And still hovering or extending more than halfway through the opening 15 minutes of volatility, reversing down became very unlikely. Inverting the bearish WedEX was required by noon Friday, so this rally only invalidates it.
Higher highs touched 2092.50, taking RSIs overbought. Reacting down is overlapping a 2087.25 sell signal by a couple of ticks. Back above 2089.50 would resume the rally, next targeting 2094.50.
Extending higher after this morning will be more difficult as Fed Chair Yellen’s Senate testimony tomorrow morning comes into view. Rate hike rhetoric between FOMC meetings suggests the market will be challenged by bearish headlines. That’s a difficult proposition to attract new buyers.
Post-open Review… Slip, slip, spike.
Delayed reaction to weak pre and post-open action.
The overnight range held tests of the 2065.00 and 2074.00 bias signals. Greeting the open between them at 2068.00 didn’t offer any compelling entry setups. Not long, or short.
Then the open spiked down, to a fresh low at 2061.50. That was aggressive, and also brief. The next hour ranged choppily back up to 2066.00. That’s not much more predictive than the overnight range.
Still overlapping the 2065.00 bias-down signal at 10:15 invoked the grace period. Sellers exploited it by eventually trending down sharply to 2056.50, whose oversold RSIs require its retest.
So, this is a bias-down environment. Its 2059.25 bias-down signal has been fulfilled. Breaking under 2056.00 would likely extend to 2053.00 — possibly this morning so long as 2062.50 holds as resistance.
This morning’s action has no bearing on the afternoon’s bearish WedEX. Trending down relentlessly isn’t required, but the possible paths should be identifiable by noon.
Post-open Review… Better bottom.
Can the target form a bottom? Can it even hold.
The decline’s premise since topping at 2110.00 has been its likelihood for unfolding rapidly, and its potential to 2043.00. It unfolded rapidly, and 2043.00 has been met.
Its first test bounced to 2047.00 before reversing to fresh lows at 2040.75. The next bounce is now probing back above 2045.00. And triggering a buy signal.
The first reaction up from 2043.00 had targeted 2046.75. Its next reaction up would target 2049.00, so long as 2042.00 now holds as support.
Attacking fresh lows to within 1 point would be likely to break lower, and probably extend down substantially. Meanwhile, holding 2043.00 would allow a bottom to begin trying to form.
Post-open Review… Spriiing, spriiing, sprii-?
Optimism persists ahead of the afternoon FOMC events.
The pre-open pullback to 2067.50 had recovered to greet the open piercing back above the 2069.75 bias-up signal. Post-open action trended up to within 2-3 ticks of the 2076.00 bias-up target.
But no higher.
This is a bias-up environment. Although its target hasn’t been met, it has been met closely enough to prevent it from becoming “unfinished business above” if not met this morning. Still, being a bias-up environment, extending higher is possible despite not renewing the signal.
Not likely.
Strong-handed buyers will be difficult to attract with the afternoon’s FOMC news looming. Meanwhile, the bias-up environment could still dip back down to attack or test its 2069.75 bias-up signal as support.