Post-open Review

Opening blip-up snaps back down into plunge.

Pre-open firming had been testing 1846.00 as resistance. Recovering it through the opening 15 minutes of volatility would have made bouncing into yesterday’s range likely.

Quickly reversing back under 1846.00 effectively shut that door.

Testing 1840.00 as support produced another blip-up, which peaked within 4 minutes instead of within 3 minutes. But its reversal down has extended to sharply lower lows attacking 1817.00. Every bounce limit has held its 3-minute test.

The next lower objective is now just 2 points lower, a retest of October 2014’s “V” bottom low at 1815.00. Its test isn’t necessary to produce a bounce — 1-minute RSI is diverging positively, and there’s a Running Correction that can be tested up to 1835.00-1836.00.

Bounce, or not, nothing requires 1815.00 to hold. And there is a not much support nearby below it.

Overnight rally’s pre-open reversal extends deeper through the open.

Already dipping from 1907.50 to 1894.00 changed the challenge from recovering Thursday’s ~1914.00 close, to recovering Thursday’s 1895.00 low.

It was not. Selling instead steepened at the open on its way down to 1878.00.

Piercing Friday’s 1881.00 upper-end was quickly rejected in time to trigger its bias-up signal. But the 1887.50 bias-up target wasn’t exceeded in time to renew the bias-up signal. So, natural resistance at the 1894.00 open has pushed price back under 1881.00.

If testing 1881.00 once wasn’t optimal to a recovery, then retesting it is bearish. The bias-up environment is within view2 of lapsing, so its bias-up signal no longer need hold as support.

Back above the 1887.50 bias-up target would indicate that selling pressure had been absorbed. Otherwise, no rejecting the post-open slide — and extending it lower through the noon hour — would target 1865.00-1868.00 and potentially new lows.

Post-open choppiness has wound the mechanism.

Gapping down more than 50 points doesn’t stop on a dime. This morning’s gap down quickly bounced sharply, from 1860.00 to 1881.00. But the 1881.00-1885.00 predictive range held through 9:45, and the balance of the morning has ranged choppily.

The new predictive range is 1865.00-1868.00. It’s getting quite the workout this  morning. Every leg has overlapped it or reacted sharply to piercing or attacking it. Now the bias environment is lapsing, and trending can resume.

Entering the noon hour under 1865.00 would be likely to trend in that direction. Next lower target area is 1853.00-1855.50. Any lower is probably a lot lower.

Back above 1875.00 instead could produce fresh session highs. But that upside should be limited to 1881.00-1885.00, and nothing short of 1992.00 would reduce the vulnerability to trending back down into the close.

UPDATE: There is now a chance that I will be away during the last hour for 30-45 minutes IN ADDITION to the previous windows. I list specifics in the next post.

Wide overnight range dwarfed by the first hour.

Ultimately, the pre-open recovery opened back at the 1891.75 bias-up signal. It had been probed temporarily overnight, and the interim dip had tested the 1875.00 bias-down target.

The overnight low was retested. The first half-hour plunged to fresh lows at 1871.00. Probing under just 1881.00 during late-afternoon would have found an air pocket. But this was early enough to attract counter-trend sponsorship. At least, the 20-point plunge was deep enough to have satisfied its sponsorship.

The 1880.25 bias-down signal was recovered in time to invoke the grace period. During that time, the 1891.75 bias-up signal was exceeded. Then the 1899.25 bias-up target was exceeded. And the potential for testing “higher prior lows” around 1910.00 has been fulfilled… to within 3 ticks of 1912.00.

Overbought RSIs require the high’s retest, presumably to actually touch 1912.00, possibly probing it by 1 point. Oversold RSIs at the low require its eventual retest, too — a great example why this is not a timing tool. But until fresh post-open highs were to print, the decline is unlikely to resume today.

The least likely scenario is playing out.

Gapping up above 1938.00 tried extending higher. For awhile. But bounces to 1942.00-1943.00 kept overlapping 1938.00. Stretching the rubber back down to the 1933.50 bias-up signal’s support helped. But only momentarily — bouncing to 1938.00 held as resistance.

Eventually triggering late no-bias, after testing both bias-up parameters, has put into play offsetting tests of both bias-down parameters. The 1926.50 bias-down signal has been tested down to 1923.00.

The 1921.50 bias-down target remains in-play. I’m skeptical.

1921.50 requires probing negative territory. That’s not likely after the gap up from yesterday upside traction didn’t invert by 9:45. Anyway, a late bias signal is less reliable than a timely signal.

Exiting the bias environment above 1933.50 — and preferably also above 1938.00-1938.99 would be likely to trend higher through the afternoon. Exiting the bias environment under 1921.50 would be credible for extending down, anyway.