Post-open Review

Pre-open surge reverses back to lows, momentarily.

Overnight probing under yesterday afternoon’s narrow range didn’t begin until Europe’s opens. A last-minute 3-point surge up to greeted the US open, blipping up to 2077.00. Compartmentalizing the overnight dip could have marginalized sellers, enabling a retest of yesterday’s 2081.75 high.

The high’s retest this morning was already unlikely since yesterday afternoon’s buyers didn’t gain traction. Only gapping up would have negated that, so triggering bias-down back under 2073.25 is not surprising.

Of course, this is expiration. Surprises lurk.

That pre-open 3-point surge to 2077.00 was one surprise. Another is its nearly complete retracement after an interim drop back to the 2071.25 overnight low. And this recovery comes in a bias-down environment, which narrowly avoided invalidation at 10:30.

Back under 2074.25 would signal that the recovery had failed. Again. The 2067.50 bias-down target’s test would remain in-play. It’s too late for fresh highs to invalidate the bias-down, but we shouldn’t be surprised if expiration leverages fresh highs into a surprising surge, anyway.

Pre-open surge’s reversal is recovered.

The pre-open surge above yesterday’s highs to 2079.50 was a singular leg. Lacking complexity, it was not a “new Globex trend extreme,” so it does not require intraday retest.

It was retraced back under yesterday’s high so the 2076.50 opening print did not qualify as a gap up. Strong-handed buyers wouldn’t have allowed that. This encouraged selling the open, which then extended down to 2071.75.

The 2077.00 bias-up signal was tested post-open but didn’t trigger at 10:15, putting into play a test of the 2068.25 bias-down signal. Without printing a fresh low after 10:15, exiting the bias environment above the bias-up signal would invalidate the bias-down signal’s test.

In fact, a buy signal triggered above 2075.00, already touching 2076.50. Extending any higher should probe the bias-up signal by either several ticks or by several points. Otherwise, back under 2074.00 would signal the bounce had failed, and resume the post-open decline targeting a test of overnight lows.

Slowness to extend gap up may be its strongest element.

I noted earlier the three immediate prior sessions. Their gaps up were ultimately reversed, but not before extending higher during the open and opening hour.

Today’s gap up to 2065.00-2065.75 quickly extended higher, probing the 2069.25 overnight high by more than 1 point during the first half-hour. Quickly extending higher didn’t translate into an uptrend, and the first hour really only ranged narrowly between 2067.25-2069.75.

And now a break lower is touching a fresh post-open low at 2064.00. Is the three-session streak turning into four?

Probably not. One obvious difference between today’s gap up reversal is its origin. The three immediate prior sessions had been contained within the range. Today’s high probed all prior highs first. That allows more room for selling without it damaging the chart.

As for that selling, its 2064.00 target was just touched. Whether or not it’s retested, the most bullish scenario at this stage of the pattern would keep pullbacks shallow. Filling the gap back down to yesterday’s close wouldn’t help to maintain the degree of optimism that upward momentum requires.

Back above 2966.75 (being tested now) would start to signal the pullback was done, and that momentum was beginning to reverse up. Having stopped pessimistically short of touching last week’s 2071.50 “new Globex trend extreme,” the open’s 2070.50 peak probably won’t be able to offer much resistance.

Otherwise, exiting the bias environment under its 2062.25 bias-up target would suggest that buyers are done. Especially with Crude Oil already having met and held its target yesterday, a downleg would unfold quickly.

Post-open action tracks its pre-open description.

I highlighted two warnings during the pre-market Tour. First, that delaying a probe under 2034.00-2035.00 would lack sponsorship capable of trending down. Second, it’s time for a session with multiple intraday reversals.

While both characteristics have defined post-open action, there’s so much more than that.

The 2038.00 open first rallied to 2043.50 before reversing back under the morning’s 2041.50 bias-up signal. That first reversal had extended down to test 2034.00-2035.00 when “no-bias” triggered, putting into play an offsetting test of the 2029.75 bias-down signal.

2032.50 was touched when the next reversal came. First surging to test the 2041.50 bias-up signal by 1 point was retraced to attack 2034.00-2035.00. That allowed me plenty of time to point out that a fresh high would target 2044.50-2046.00.

In fact, the morning’s 2046.50 bias-up target was touched. Exiting the bias environment above it would invalidate whatever had been put into play by holding its 2041.50 signal through 10:15. Offsetting test of the bias-down signal? Moot. No-bias trending above the bias-up signal? Moot.

So, is everyone ready for another intraday reversal? The recovery is no more durable than the drop preceding it. Reacting sharply from one extreme to another is natural for a trading range. Not necessarily the extreme extremes, but internal extremes.

Now reacting much more often and more steeply is building up energy to break an extreme extreme. At least, to break it temporarily before reversing much more substantially in the opposite direction.

Post-open extension a little too slow for comfort.

While the path back down didn’t have any timing requirement, extending the gap up should have developed with little delay after the open. The delay in extending higher could have been littler, but it did extend higher.

Gapping up to this morning’s 2050.50 bias-up target had dipped quickly to 2047.00, and the first half-hour’s highs were still overlapping the overnight highs. But price has gradually extended higher to 2056.50.

Extending higher has fulfilled the renewed bias-up target at 2055.00. It was being overlapped at 10:15 to avoid doubly renewing the bias-up. Its reaction down is testing 2052.75 into 10:30, targeting 2050.75, and potentially also 2049.75.

We can give that a benefit of the doubt to buyers gaining traction. Probing back under 2034.00-2035.00 may be rejected. Just keep in mind that the optimal rejection would have extended higher sooner. Exiting this morning’s bias environment back under its open could deteriorate very quickly intraday.