Post-open Review

Absorbing the open’s gap down isn’t succeeding.

Testing 2055.25 indicated one more lower low likely at 2054.00. The open’s bounce to 2060.00 resolved down to 2054.00 and reacted up. But not back up to 2060.00 before retracing entirely. The next reaction up got a little higher, but still not back up to 2060.00 before retracing to another fresh low at 2053.25.

The bullish scenario would have reacted up just once from a fresh post-open low. Dipping again could still recover if rejected without delay. But the third dip was overkill –no longer accumulative and getting too close to 10:15/10:30 for a bullish signal by then.

None of which is necessarily bearish. It might be bearish, or it’s just not immediately bullish. Lower lows aren’t required, but rallying now during the bias-down environment would be suspicious.

The renewed bias-down target at 2056.75 was being overlapped at 10:15 to avoid doubly renewing the bias-down signal. That’s also not necessarily bullish or bearish. But it does suggest that even the most bearish scenario would bounce first — even if only to higher prior lows at 2065.00 or 2070.00. That said, there’s no bullish reason for a fresh low under 2053.245

Sliding sharply into and out of the open.

The overnight rally’s risk was that it had priced out buyers, while becoming attractive to sellers, which would point down. Actually, a greater risk was to retest the 2086.00 bias-up target post-open before reversing down.

But the reversal down greeted the market under 2082.00. Extending through the 2080.50 bias-up signal failed to trigger it. An offsetting test of the 2071.25 bias-down signal is in-play.

The bias-up target was not tested post-open, so an offsetting test of the 2065.50 bias-down target isn’t in-play. Not officially. Nor is yesterday morning’s 2062.75 outstanding bias-down target. But their tests are likely until signaled otherwise.

Tug of war is currently favoring sellers.

It has been awhile since we’ve seen such wide ranging, without any net move, so far past the open. More on that later…

Opening at the 2068.00 bias-down signal initially surged to 2073.50. Its complete retracement was recovered quickly to 2075.00. The next complete retracement has dipped even deeper to 2064.50. That overlapped the bias-down signal in time to invoke the grace period. It wasn’t recovered through 10:30, triggering “late bias-down.”

The 2062.75 bias-down target is in-play. As we discussed during the pre-market Tour, that would likely probe under yesterday’s 2062.00 low. Meanwhile, back above 2070.00 would start to suggest the late bias-down is dead.

As for the open’s wide ranging, that helped to dilute the requirement for a rally to be immediate. Gapping up was the original requirement. The sizable legs then diluted the requirement for a quick recovery.  Now all of those conditions have resolved in fresh lows. Buyers seem pretty eager, so finishing with the downside this morning should resolve in a very aggressive rally.

Doubly renewed bias-down.

The overnight slide had greeted the open at the morning’s 2087.25 bias-down signal. Post-open action blipped-down 4 points momentarily, but its reaction up to 2088.00 was retraced even more aggressively. And much more substantially.

The 10:15 bias timing window renewed the bias-down signal by exceeding the 2082.25 bias-down target. The first hour has extended down to the 2072.50 minimum lower objective.

Objectively, by probing under Friday’s low, the market has fulfilled the minimum consequence to Friday’s failure to reverse up from probing under 2088.00. Structurally, by testing the 2072.50 “throat” of a recent “V” bottom, the market has tested a relevant support.

Calculably, potential for testing the 2070.00 area now relies on maintaining the downward momentum. And that’s being threatened — at least 1-minute RSI just diverged positively at 2071.75, before reacting up to 2075.50.

I’m not looking for a durable bounce this morning, and probably won’t chase a buy signal without the market forming a bottoming pattern. Potential to extend down remains intact, but no longer required.

Recovering the post-open drop would have consequences.

Another pre-open dip having attacked the Payrolls’ 2082.00 low. The open was greeted back above 2088.00. Its recovery extended to 2096.25.

RSIs improved throughout, so it was surprising not have extended higher. But the 2095.00 pullback limit was violated and the 2091.00 sell signal was triggered, on the way to sharply lower lows at 2077.50.

This renewed the bias-down signal by breaking under the 2085.50 bias-down target through 10:15. The renewed bias-down target was met already at 2079.00.

Renewing the bias-down made lower lows likely to test the 2070.00 area. But a bounce is already testing the 2091.50 bias-down signal as resistance. Exiting the bias environment above it would marginalize sellers for the day. And probably for a lot longer, ultimately being yet another failed probe under 2088.00.

Exiting the bias environment back under its 2085.50 bias-down target would not reject the bias-down. Sellers would not be marginalized. And the 2070.00 area would remain in-play.