Post-open Review

Target me, supports held, last gasp recovery attempt in process.

The pre-open surge that attacked 2030.00 was reversed back under 2027.00 to greet the open at 2022.00. The initial extension hesitated above the 2015.25 bias-down signal, but never recovered.

Bias-down triggered late, its grace period invoked by a 7-1/2 point bounce to 2018.00. Refueled sellers quickly probed the 2008.75 bias-down target by 6 ticks.

Nothing requires the bias-down target to hold its test, nor prevents the decline from extending. But probing above 2011.00 (being tested now) would likely develop into an upleg.

A recovery is possible for having neutralized the attraction back down to the Fri-Mon Island’s 2008.00-2014.50 “lower prior highs.” Their complete recovery isn’t yet done. Having fulfilled the bias-down target, exiting the bias environment above the bias signal’s 2018.00 prior high would help to confirm momentum has reversed up.

And that would play right into the hands of a bullish WedEX. A WedEX that the morning’s bias-down signal has threatened to invert, if not rejected at the bias environment’s exit.

Rally setup signals inversion, and inverts.

Yesterday afternoon’s buyers had gained traction for their efforts, making this morning likely to trend up. The setup is always vulnerable to inverting — to signaling the opposite — in this case, by trending down through the open.

The open trended down.

The open trended down, after a pre-open bounce had retraced a healthy 61.8% of the pre-open drop. Sellers were refueled, and they exploited the opportunity.

The 2069.25 opening print, which is also this morning’s bias-up signal, immediately reversed down. The 2057.75 bias-down signal was soon tested. Ranging sideways around it through 10:15 invoked the grace period, but the decline resumed down to the 2050.50 bias-down target.

That might have been an attractive buying opportunity — fulfilling the downside target, especially while RSIs diverged positively, which they were doing. But the inverted morning rally signal suggested otherwise. Now an extra downleg has touched 2043.25, its reaction up testing 2049.00.

Opening spike up begins trending back down.

The open was greeted at the 2048.00 bias-up target. A spike up almost immediately tested 2052.00. The gap up above yesterday’s ~2046.00 high was maintained through the opening 15 minutes of volatility. So, reacting down should prove only temporary.

In fact, reacting down has been relentless and substantial.

2046.00 and 2048.00 gave way as support. Yesterday’s range was probed, as low as 2039.00. This being a bias-up environment, its lower-end should be defined by the 2041.00 bias-up signal. Which is being probed as support.

Bouncing should test 2046.00. Perhaps even the 2048.25 opening print. Its retest from below is all but required, now that yesterday’s range has been probed from above.

Retesting the opening print and already trending down into FOMC can neutralize its attraction above. Not yet neutralizing that attraction above would greet the FOMC news from a position of strength.

Post-open surge creates safety buffer.

Pulling back pre-open several points under 2032.00-2033.00 resistance was reversed back up immediately to attack 2038.00. That was the only way to extend the gap up in this pattern. Ultimately the next higher objective at 2040.00 was tested up to my highest calculable resistance at 2041.50. Its reaction down has touched 2034.50.

There is no requirement to trend any higher than the 2040.00 test. Overbought RSIs at the high require a retest, but its current reaction down can extend to 2032.00-2033.00 first.

Still testing both bias signals as the grace period begins.

Actually, that scenario has since been resolved. This is a late bias-down environment. But even that signal is suspicious.

The 2009.50 bias-up signal was tested at the open. Holding its test through 10:15 would have put into play and offsetting test of the 1995.50 bias-down signal. Except, the 1995.50 bias-down signal was being overlapped within 3 minutes of 10:15 to invoke the grace period.

1995.50‘s test was courtesy of a 13-point plunge. That was nothing. A 20-1/2 point surge probed fresh highs at 2014.00. It overlapped the 2009.50 bias-up signal in time to invoke its grace period, too.

Not unprecedented. Just too very rare to test both bias signals around 10:15.

The biggest move yet was the return to fresh lows at 1992.00, triggering late bias-down. Even that was made suspect by immediately bouncing to 2001.25. It has now reacted down back under the 1995.50 bias-down signal.

This is another opportunity to prove sellers have no sponsorship under Friday’s lows. Exiting the bias environment in positive territory would be least such indication. By the same token, exiting the bias environment in negative territory could be the catalyst that attracts much more durable selling pressures.