Post-open Review

Overnight probes retraced entirely pre-open.

Extending higher without delay had required gapping up and maintaining it through the opening 15 minutes of volatility, if not also extending higher. Overnight probes above yesterday’s 1927.25 high had teased at that potential.

But the open had dipped back to 1926.00. A blip-up stopped 1 tick short of even touching yesterday’s 1927.25 high. Then price began sliding back to 1920.00 — and lower, touching 1918.00.

Neither bias signal was touched post-open, so this is a no-bias environment without any requirement to test anything specific. Testing either bias signal would be likely to hold.

The bias-up signal was touched minute before the open. Touching it post-open would have put into play an offsetting test of the 1916.50 bias-down signal. That’s otherwise not necessary, but possible since we’re not looking for a recovery today.

Meanwhile, having held yet another reaction down to 1920.00, a bounce has potential to 1925.00 or to retest 1927.00.

Open’s surge evolves into bigger rally.

The open’s surge through 1907.00 was only temporary, despite touching 1911.75. Its reaction down fell to 1904.00, but in a singular leg that was still overlapping 1907.00 at 9:45.

So, 1907.00 wasn’t recovered, but neither was it rejected.

Being a singular downleg, it was still the first reaction down from the previous trend’s extreme. That leg has a horrible track record of triggering a durable reversal signal. Even the most bearish scenarios tend first to retrace the first reaction by 61.8%.

So, reversing down was even less likely.

The optimal pullback would have stopped 4-6 ticks higher. Nevertheless, not triggering a sell signal by 9:45 had further marginalized sellers. Triggering a buy signal extended higher toward the next higher objective at 1920.00.

1920.00 has been attacked to within 6 ticks. Back under 1915.25 would trigger a corrective dip targeting 1911.00. Simultaneously overbought 1-minute and 3-minute RSIs at the high would require its retest, presumably up to the 1920.00.

Late dip extends well toward bias-down target.

The 1882.25 open dipped to 1879.00 but recovered the dip fully at 9:45. The burden of proof was on sellers, they tried, and they failed. That would be bullish if buyers had exploited it by reversing above the open, but they did not.

And sellers exploited that. Another dip fell to 1875.50. Reacting up to probed its bounce limit higher than its first 3 minutes. Not by much, not for long, and not without continually overlapping it. All of which sellers exploited by dipping again to 1872.50.

Late breaks reflect weak-handed sponsorship. They don’t prevent extending down, but that typically ends aggressively back to the upside. Coming within 3 ticks of the 1871.50 bias-down target instead of just 4 would have helped to suggest that sellers are done.

Nevertheless, back above the 1878.50 bias-down signal at 10:30 or 11:30 would trap shorts. Otherwise, the 1871.50 bias-down target remains in-play.

Sellers fail to retain control.

The pre-open reaction down from retesting the 1848.00 area extended down through the open. The upper-end of yesterday’s range was briefly pierced by a couple of tick in reaction to 10:00’s econ report. That’s essentially also this morning’s 1834.50 bias-up signal, which ultimately triggered at 10:15.

The 1041.25 bias-up target was attacked into 10:15, but not exceeded in time to renew the bias-up signal. No matter, this is still a bias-up environment. While that setup often holds as resistance for the morning, the open’s 1845.50 high is now being retested.

Triggering bias-up doesn’t necessarily reflect buyers regaining control when they’ve met and held a test of the bias-up target. It doesn’t marginalize sellers, although they’ve lost control. Exiting the bias environment at 11:30 back under its 1834.50 bias-up signal would suggest that sellers are trying to regain control. Exiting the bias environment above the 1845.50 opening high could simply drift higher into the afternoon.

Did the bounce refuel sellers?

Opening action surged  instead of retesting overnight lows. Potential up to 1834.50 was attacked to within 1 point, taking RSIs overbought.

That has been steadily retraced to signal further reaction coming. Its 1815.25-1817.00 target has been fully tested. Breaking under it would all but target a retest of overnight lows. And retesting overnight lows would all but resume the decline.

Why is it possible again to resume the decline? Not already extending down at the open had made a reaction up likely. That was because of the difficulty attracting sponsorship at that stage. But now a bounce is reacting down. And the bigger challenge has become attracting sponsorship to stop the trending underway.

Attention is turning from price to time. Not timing windows, but time remaining for liquidity. And not just the week’s remaining liquidity which is usual for Thursday mornings, but also the illiquidity of a three-day holiday weekend.

Breaking lower through the bias environment’s exit could become increasingly ugly through the afternoon. Otherwise, already rallying again would target 1850.00 and possibly much higher.