Post-open Review

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The pre-open surge to 2053.00 had dipped to greet the open at 2049.00. Post-open action dipped a little deeper to 2046.00. Any lower would have triggered a sell signal. So, literally, as much selling pressure as could be expended without gaining traction was expended.

Literally? Numerically. Anyway…

The opening 15 minutes ranged narrowly sideways. This wasn’t bearish since the burden of proof was on sellers. In fact, the range resolved up to 2054.25.

Reacting down has violated the 2053.00 pullback limit down to 2049.75. Back above 2052.50 would signal that the rally had resumed, next targeting 2056.25-2057.00.

Meanwhile, the open’s delay in extending higher makes me suspicious about the recovery’s post-open sponsorship. Reacting down under 2048.75 would start to signal momentum reversing back down. It’s not a likely scenario, but there’s no assurance that this week of reversals has ended.

No-bias trending retraced. More consequences on tap?

Gapping open at 2047.00 bounced once to 2050.00 and then to 2051.00. And then their 2045.50 interim low broke lower to and through 2044.50.

2044.50 is this morning’s bias-down target. Probing under it was too late to renew the bias-down signal. This is still a bias-down environment, capable of extending down, and already testing 2041.25.

2044.50 is also “unfinished business below” from yesterday. Its retracement was required, and could include a visit to 2039.00. We’ll expect its test so long as 2044.50 holds as resistance.

Back above 2046.50 would start to suggest this morning’s dip had run its course. Otherwise, the trend remains down.

Sellers gain traction, then give buyers more rope. A lot of it.

The open’s test of 2041.00 resistance was reversed down to fresh lows at 2035.00. Trending down through the opening 15 minutes of volatility indicated that bearish scenarios remained intact and that sellers would not be marginalized.

Sellers aren’t marginalized? Really? The 2035.75 bias-down signal didn’t trigger, and an offsetting test of the 2044.50 bias-up signal was put into play. It was fulfilled soon after a knee-jerk reaction to the 10:30 EIA report retested 2035.75 as support.

Sellers aren’t marginalized? Really? Probing above the 2044.50 in a no-bias environment — now attacking the 2049.50 overnight high — is “no-bias trending.” That requires being retraced entirely before a durable rally could be launched.

Sellers aren’t marginalized. Really. Only exiting this morning’s bias environment above its 2051.00 bias-up target would invalidate the “no-bias trending” and its attraction back down to 2044.50. Otherwise, “no-bias trending” is usually the work of weak hands. Regardless of the bounce’s degree or slope, patient sellers allow it so their satisfied opposition is less influential later.

If this morning’s sellers did gain traction, then this afternoon’s reaction to FOMC Minutes should resume the decline, or accelerate it if resumed already. Extending higher anyway would leave unfinished business below at 2044.50, and potentially lower.

Surviving post-open fresh low isn’t yet out of the woods.

Simply rallying post-open wasn’t likely to be the product of strong-handed buyers. A more credible bottoming setup would put buyers to the test of rescuing the market from fresh post-open lows.

They got their chance. They still need another.

Not another lower low. The post-open drop from 2045.50 to 2036.75 was sufficient. And it did react up to 2048.00. But that was 3 ticks short of even touching this morning’s 2048.75 bias-down target, let alone recovering it to avoid renewing the bias-down signal.

So, evidence of a bottom still still needs backing-and-filling this morning, and then exiting the bias environment at 11:30 in rally mode. Backing-and-filling would target 2041.00 (being tested now), possibly also 2039.25. Testing either one should react up so upside momentum can meet 11:30 head-on.

Meanwhile, the door remains open to extending the decline. A fresh session low wouldn’t put buyers to another test, but fail them for the earlier one. Next lower objectives discussed during the pre-market Tour are 2032.50, 2021.00-2022.00 and 2009.00.

Pre-open slide dips back under Friday’s highs.

Double Tops want to be retested. Overnight patterns must establish their influence of intraday action during the opening 15 minutes. So, retesting the pre-open Double Top at 2071.50 required maintaining the overnight high’s orbit.

Reacting down pre-open from the overnight Double Top had room down to 2065.00 before breaking free from from the overnight high’s orbit. The open was 3 ticks lower, and extended relentlessly to 2061.00.

That exceeds the overnight high’s attraction. I’m giving a recovery some benefit of the doubt anyway, so long as fresh post-open lows are probed first. This being a no-bias environment, a test of its 2059.50 bias-down signal should define the range’s lower-end, even if probed.

Exiting the bias environment at 11:30 would suggest the overnight highs will be retested without first probing fresh post-open lows. Buy signals probably won’t be considered without that much strength or else fulfilling fresh lows.