Post-open Review

Trending up since the open.

The pre-open dip to 2089.00 was essentially a 61.8% projection from the overnight high’s retest of 2092.50. That natural support, along with there being no active attraction below, at least made the level vulnerable to fading back up.

Opening action soon attacked the overnight highs, and eventually pierced and probed its way higher. Attacking “unfinished business above” at 2094.75 to within 3 ticks reacted down instantly to 2091.00, and then bounced right back up.

This morning’s 2093.75 bias-up signal invoked the grace period at 10:15, and still overlapping it at 10:30 triggered noN-bias. Not a bias-up targeting 2098.50. Not a no-bias targeting an offsetting test of the bias-down signal below. Price can trend up or down, or range sideways.

Probably, price will range sideways, or flat-to-higher. Volume is shrinking ahead of the three-day weekend, and paralysis is growing ahead of Yellen’s afternoon appearance. Greeting the latter from up here would remain vulnerable to at least a knee-jerk reaction up.

It’s premature to forecast whether a knee-jerk reaction up would extend or reverse down sharply. But greeting the event from back under the 2089.75 open would likely react down.

Neither bias signal even touched.

Yesterday afternoon and overnight action ranged narrowly, no matter how choppily. So, there’s no actual pattern that reflects buying and selling pressure, or a trigger to unleash it, and a target that satisfies it. Execution is based only on retracement calculations and extensions. All guided within the context of bigger picture influences gleaned from price action through yesterday’s close.

That context is the likelihood for today would likely be about backing-and-filling. The confirmed breakout has entrenched the rally, so that it can afford to rest while weak-handed sellers trap themselves. The rally didn’t gain traction yesterday afternoon, so extending higher this morning was unlikely, or likely to fail.

Unfinished business above at 2094.75 could have coaxed price higher to fail later. Opening strength limited that to piercing overnight highs by 1 tick at 2091.75, also an attack on yesterday morning’s high to within 1 tick.

The reaction down to 2084.75 is reacting up 4 points. Another point is possible while remaining well within the range. Back under 2086.50 would signal fresh lows, having room down to this morning’s 2080.50 bias-down signal.

It’s probably a dry cleaners morning, but not necessarily a dry cleaners afternoon — a Fed speaker is scheduled during the noon hour. Without pulling back more deeply first, resuming the rally during the final hour might require the rubber band effect of a violent momentary blip-down.

Straight out of the open, straight up, straight to its target.

The overnight rally had met the 2085.75 bias-up target to within 1 tick. Its pre-open pullback pierced this morning’s 2080.50 bias-up signal by 1 tick. The post-open recovery didn’t hesitate. A buy signal quickly triggered above 2083.75 and extended to fresh highs.

Minutes after renewing the bias-up signal at 10:15, the 2092.00 renewed bias-up target was touched. Its 3-1/2 point reaction down has violated the pullback limit. Simultaneously overbought 1-minute and 3-minute RSIs at the high require its retest.

If not for the high’s required retest — probably up to 2092.75 — a sell signal would already have triggered. A little deeper pullback under 2088.25 would be likely to extend to 2084.00 before recovering.

This may be an opportunity for the rally’s sponsorship to rest, refueling by letting shorts trap themselves. A repeat of yesterday’s session-long rally is not impossible, but also not likely.

Is the setup over-promising?

Having trended down into yesterday’s close, gapping up above yesterday afternoon’s highs formed a “session-long rally” setup. Follow-through was productive. Very productive.

I noted in the pre-market Tour that this leg’s minimum objective was 2068.00, with room for noise above it to 2072.00. That room was touched momentarily.

Meanwhile, 3-minute RSI was persistently overbought. That offered the confidence not to sell, let alone not to short. It is still overbought. Pullbacks have room down to 2066.50 without threatening the uptrend. The session-long rally makes that unlikely.

Each timing window with one exception should probe above its prior timing window. That exception tends to be the noon hour. The next potential target is 2080.50.

Volatility narrows considerably from overnight.

The fifth and final overnight swing almost matched the 12-1/2 point surge which had originated at Europe’s opens. That’s not to say its 11-point reaction down has reacted much. In fact, its 7-point pre-open bounce to 2051.75 was only now touched — and only touched — more than 30 minutes past the open.

Trending is difficult to launch from a standing stop, that being the 2049.00 equivalent to Friday’s cash session close. Further making any upside and downside difficult this morning is the first hour’s five 15-minute checkpoints.

If any three of the first five 15-minute checkpoints overlap the same relevant level, the bias environment tends to be directionless. And the first three checkpoints (9:30, 9:45, 10:00) each overlapped 2049.00. The 10:15 bar was within 1 tick.

Recovering the 2054.00 bias-up signal through 10:30 would invalidate the no-bias, and clear a path up. Otherwise, this is basically a “dry cleaners” morning, i.e. time to run errands. No offsetting test of the 2043.00 bias-down signal is required, but drifting back into negative territory would become likely.