Post-open Review

Retest of prior highs didn’t attract sponsorship.

The ECB news had been greeted at this morning’s 1987.00 bias-up target. Its knee-jerk reaction to 2001.00 was retraced entirely before the open, and then some, down to 1984.25.

The open’s blip-down to 1980.50  was consolidated, and then recovered up to 1995.25. Reacting down was supported by the 1987.00 bias-up target. This is a bias-up environment.

That didn’t prevent sliding down to 1976.00. Despite its depth, that leg only overlapped the 1981.75 bias-up signal. And it reacted back up to 1984.00.

This being a bias-up environment, the 1981.75 bias-up signal should define its lower-end. Otherwise, a lower low would be attracted to the 1968.00 unfinished business below left outstanding from yesterday morning.

Pre-open slide extends through the open, and then not.

Reacting down from the 1994.00 overnight high greeted the open at 1987.50. Extending down choppily post-open tested 1982.00. That fully retraced to where the overnight consolidation had first broken higher.

This morning’s 1986.00 bias-up signal failed to trigger. A blip-up attacked it to within 1 tick at 10:15, but it wasn’t touched. A bigger blip-up overlapped it at 10:30, but that was retraced. An offsetting test of the 1977.00 bias-down signal is in-play.

Meanwhile, a jump in Crude Oil triggered a bigger surge to 1991.00. That’s above the bias-up signal during a no-bias environment. It is “no-bias trending” that is doomed to failure. And it potentially stretches the rubber band for a more substantial drop.

A more substantial drop remains in-play with the topping template, whose timing suggests a much deeper and steeper drop this morning. Not declining would not be optimal, but only rallying can invalidate the vulnerability to extending down further.

Shallow bounce resolves in fresh lows.

We’ve been tracking a potential topping pattern, and its final optimal condition is being challenged.

Rather than bounce throughout this morning, to whatever degree, the bias environment is probing lower and lower lows. In fact, the 1991.00 bias-down signal was renewed by exceeding the 1985.00 bias-down target through 10:15. Already 1979.00 has been tested. Twice.

Exiting the bias environment and entering the noon hour back above the bias-down parameters would undermine the topping. So would rallying this afternoon instead of declining.

Otherwise, while the impatience might reflect weak-handed sellers, the trend change may be affected only in its timing.

Topping pattern still being traced.

In Saturday’s discussion of the potential topping pattern, I noted that the real fireworks might not appear until Tuesday afternoon or Wednesday morning. Monday’s action could be choppy and frustrating, recovering from a shallow gap down — whether recovering a little or a lot — to close only slightly positive.

Even more frustratingly, recovering from this morning’s shallow gap down has avoided triggering a bias. The 1986.00 bias-down target was touched at the open, and the 1992.50 bias-down signal was touched within 3 minutes of 10:15 to invoke the grace period. It was still being overlapped at 10:30 to trigger noN-bias.

A retest of the bias-down target is not in-play. Offsetting tests of both bias-up parameters are not in-play. The bias levels remain influential if tested, but not with any specific consequence.

Price action is still tracking the broader template, now having recovered the shallow gap down back up into slightly positive territory at 1998.00. But it’s early. The recovery might fail; extending to fresh highs might not be rejected. Holding 1995.00 would keep alive the upside probing.

Payrolls’ surge drops back into the range.

The pre-open Employment Situation report was greeted at 1995.00. Its knee-jerk reaction surged to 2002.25, which reacted down quickly to 1988.00. The open was greeted back at 1995.00.

A post-open dip back under 1993.00 targeted a retest of the pre-open bounce, or at least to within 3 ticks, which was fulfilled down to 1988.50. That post-open dip extended to 1984.00.

And that post-open dip held its test of the 1985.00 bias-down signal. So, dspite having tested the 1993.75 bias-up signal, and offsetting retest of it was put into play. The retest has been fulfilled already. In fact, it is extending to also test 1997.25 resistance.

This is still a no-bias environment. At least a pullback to the 1993.75 bias-up signal is likely at some point. Its test might hold and launch a retest of the preopen high, although its retest isn’t required. Retesting the pre-open high first would be even more vulnerable to reversing back down.