Post-open Review

Gap up to target is being exceeded.

The overnight rally had begun probing yesterday’s 2645.50 high to attack 2650.00, and then blipped-up to 2657.50 into the open. The actual open was also the rally’s 2656.00 next higher objective. Its resistance reacted down to 2647.00, overlapping a couple of sell signals but never attracting reinforcements.

Testing a 2651.75 buy signal at the 10:15 bias timing window got a benefit of the doubt for having absorbed sellers. Coincidentally, a favorable China trade headline several minutes later triggered a spike up to 2661.00. And now its retracement has recovered to fresh highs at 2668.50.

Having met 2656.00, no upside requirement is in-play. The next higher notable resistance — its room for noise — is at 2668.50, now being tested. Closing above 2656.00 would put into play the rally’s next higher objective at 2701.00. Closing back under 2656.00 wouldn’t be predictive of anything, other than sponsorship not exploiting the opportunity to further entrench the rally.

Overnight drop finds no reinforcements.

Gapping down to and through the 2598.00 “lower prior highs” would have inverted yesterday’s bullish WedEX. But its overnight test down to 2596.50 was already recovering before the open. WedEX remains bullish.

Testing and holding the bias-down target post-open would have reflected weak-handed sellers. Post-open action is rallying anyway, and not recovering the 2609.50 bias-down signal. So, at least an offsetting test of the 2619.25 bias-up signal is in-play. It has been attacked during a range that reacted down to 2611.00.

Already attacking the bias-up signal to within 3 ticks keeps it from becoming unfinished business if left outstanding. And holding the pre-open test of the 2601.00 bias-down target was too early to require an offsetting test of the 2625.25 bias-up target. But holding 2611.00 would be more vulnerable to extending higher anyway.

Gap up extends to fresh highs.

The overnight pullback from its 2617.00 high touched 2607.00. Already recovering to open at 2615.00, the pre-open recovery extended higher to touch 2624.00. Double topping there never exploited the room for noise up to 2626.00, and reversed back down to touch the 2613.25 bias-up signal.

This is a bias-up environment, so the 2613.25 bias-up signal should define the window’s lower-end. Probing under it could start to gain traction regardless of the remaining potential upside.

Back above 2617.75 would signal the rally had resumed, at least to retest the highs, presumably targeting 2626.00

Upside target met, meets downside reaction.

Retracing the overnight 20-point rally to 2600.25 had come within 1 tick of the 2580.00 earlier Globex low. Before the open. The open was greeted 5 points higher, making the Globex-flip setup unlikely to try forming.

Immediately rallying post-open became a Running Correction as overnight highs were recovered. It launched a surge to 2607.00, fulfilling the rally’s next higher objective at 2606.00. A collapse began several minutes later and extended to retrace the Running Correction’s 2593.00 low.

Bias-up triggered easily. But renewing the signal above its 2595.75 bias-up target failed at 10:15, despite having probed it by 11 points just several minutes earlier. This is still a bias-up environment, so the bias-up target can be exceeded again and the rally could even resume. But either is always difficult when buyers have gotten ahead of themselves.

We’ve expected a fresh high to test 2606.00, which it did. We’ve expected that probing fresh highs would be tenuous if attempted, which it was and it is. No matter how much we expect that to result in a peak, nothing prevents trying to probe higher and delaying a reversal down.

Post-open recovery hits resistance.

The 2567.25 overnight low had recovered back up to Friday morning’s 2577.00 “higher prior low” and ranged sideways into the 2575.50 open. A quick dip down to 2571.00 was reversed up to 2580.00. Friday morning’s low was recovered through the opening 15 minutes of volatility.

Extending higher overlapped the 2584.25 bias-down signal at 10:15 to invoke the grace period. A pullback to 2580.00 was recovered to attack 2587.00. But the 2584.25 bias-down signal wasn’t recovered at 10:30. Officially, this is a bias-down environment.

But it is a late bias-down, by a 2-tick margin, after already meeting its bias-down target. Not the most reliable. Above 2588.00 would signal that the recovery was extending. Back under 2582.50 would start to signal another dip to the 2576.00 bias-down target underway.