Post-open Review

Substantial recovery gets ahead of itself.

Opening at 2039.25 and probing fresh lows created a bottoming pattern that was sealed upon recovering 2038.50. Its reward was expected to be a substantial morning-long rally.

We got the substantial part already, but not yet the morning-long.

The 20498.75 bias-down signal was touched by 10:15. Actually, within 3 minutes of 10:15, invoking the grace period. It was not recovered through 10:30, triggering late bias-down.

Late bias-down, or not, the 2038.50 buy signal’s latest pullback limit held its test to avoid being violated. Another surge extended the recovery to 2053.50.

Two substantial rallies do not equate to morning-long.

Being a bias-down environment, the 2048.75 bias-down signal should define the range’s upper-end. This requires its retest. Triggering bias-down had put into play a retest of the 2042.50 bias-down target. So, 2048.75 need not hold as support.

After at least testing 2048.75, this being only a late bias-down environment, the rally could still resume. Meanwhile, a deeper pullback would be more credible.

The market has become stuck in Alabama mud.

From the movie “My Cousin Vinny” we learn that anyone who’s been stuck in Alabama mud knows your car needs a limited slip differential to extricate itself. Step on the gas, and one tire spins while the other does nothing.

This assumed only one tire is in the mud. This morning’s price action has both buyers and sellers stuck, ranging choppily around 2056.00. Both tires are spinning wildly, without gaining traction either way.

The first hour’s first three 15-minute checkpoints overlapped 2056.00. That had already warned us trending this morning would be difficult or unlikely. There are five 15-minute checkpoints, including the open and the one-hour mark. with only one not overlapping 2056.00. And, then, only barely.

Today’s most bullish scenario was likely to be backing-and-filling, expressing pessimism ahead of tomorrow’s payrolls report which can be bullish from a contrarian perspective. Walking gingerly on eggshells can be another option for pre-news price action. It offers limited trading opportunities, except waiting for an extreme to fade. Be careful not to force a trade.

Probing fresh highs, if not actually extending.

Opening weakness touched the 2056.00 bias-up target as support and reacted back up to fresh highs at 2063.25. A reaction down to 2059.00 remained under pressure through 10:15, holding the 2061.25 renewed bias-up target.

This is still a bias-up environment. A renewed bias-up environment whose target was exceeded through 10:15.

Exceeding the 2061.25 renewed bias-up target through 10:15 would have put into play 2067.00-2068.00, but that was avoided. Also avoided was a break back under the 2056.00 bias-up target. And neither was exceeded by 10:30, which doesn’t suggest any sponsorship is available for trending.

A buy signal would trigger above 2062.50 (being tested now) targeting 2067.00-2068.00, and under 2059.75 would target 2054.25. Trending to either this morning would be vulnerable to reversing sharply. Not trending this morning would be likely to trend this afternoon.

Post-open dip tries recovering too little, too late.

The pre-open dip to 2020.75 was itself probed post-open down to 2019.25. Yesterday morning’s 2023.00-2023.00 lows held as resistance through the opening 15 minutes of volatility.

Rather than extend down, a bounce has attacked 2027.00. Still overlapping the 2024.50 bias-down signal at both 10:15 and 10:30 has triggered noN-bias — not a bias-down, and not a no-bias, so there is no requirement to fulfill any bias parameter.

The pattern is similar to yesterday. Not the formation, which is clearly different. But the template of remaining under a relevant level through a relevant timing window, and then trying to recover.

Like the rally from yesterday’s lows, this morning’s recovery attempt should be retraced entirely. Unlike yesterday’s rally — so long as the bias environment isn’t exited above 2027.25 — the failure should not be so delayed. The initial attraction below is 2020.75, and then essentially 2009.00.

Overnight rally rejected, but not reversed.

Despite surging overnight to attack 2040.00. Despite rallying overnight to the 2035.25 bias-up target. Despite having gapped up through Thursday’s 2030.25 post-close high. Despite all of that upside, post-open action has been about selling.

A blip-down to 2025.25 reacted up to attack 2030.00. But the 2028.25 bias-up signal was still being overlapped both at 10:15 and at 10:30 to trigger noN-bias. No retest of the bias-up target is in-play. Nor is an offsetting test of the bias-down signal required.

Although most noN-bias environments range narrowly around the bias signal, this morning’s has broken to fresh lows at 2023.25. Already having rejected the overnight follow-through, probing deeper into negative territory can confirm the only remaining setup — that Thursday’s rally was weak-handed, requiring complete retracement.

Retesting Thursday’s 2012.00-2015.00 lows has room for noise down to 2009.00 before putting into play 1980.00. Back above 2031.00 would start to suggest the drop had run its course.