Post-open Review

Opening volatility offers a little something for everyone.

Overnight tests of “lower prior highs” at 2749.00 not only held, but also launched a pre-open recovery up to 2786.50. Actually, the last 12 points of that was the knee-jerk reaction to CPI. The open was greeted there, but within a choppy range.

The choppy overnight range and the choppy pre-open range kept it going to produce a choppy post-open range. Dipping to attack 2772.00 and surging into positive territory attacking 2799.00 has now been reversed to attack overnight down to 2751.00.

Late no-bias triggered when the last reversal barely managed to touch the 2778.50 bias-down signal within 3 minutes of 10:15. The grace period recovered, yet the reversal has taken control. Without producing a probe above the pre-10:15 high, exiting the bias environment under its 2769.50 bias-down signal would invalidate its signal. So, no-bias and its offsetting test of the bias-up signal seem to be off the table.

At least a test of the 2749.00 “lower prior highs” is likely. That would also be a retest of the overnight lows, but the overnight/intraday difference doesn’t make them any likelier to break lower. And the same setup applies — testing 2749.00 during a timing window and recovering it before the exit could establish a near-term bottom. Its break could otherwise trend down sharply.

29-point plunge already testing its objective.

Gapping up today could have given a recovery better chances for reversing the trend back up. Repeatedly recovering intraday dips without reversing above a prior high had kept alive last Thursday-Friday’s downside momentum. And if the Monday-Tuesday action wasn’t accumulation, then the next lower objective would be 2850.00.

That was quick. The first half-hour slid from its 2879.50 open down to 2851.00. That’s within 4 ticks of the objective, which is close enough for a new extreme. Bouncing to 2861.50 is is reacting down, which threatens fresh lows — and the next lower objective would be 2844.00.

The relatively late break from overnight ranging does keep alive potential for only a brief dip. The open maintained the break and extended it, quickly minimizing the potential for bouncing back into the overnight range. But quickly collapsing can also reflect weak hands that are sooner neutralized.

Regardless of this dip being a bottom, or only a pause, not already rallying into the noon hour would make fresh session lows likely.

Overnight and post-open dips trap shorts.

The overnight slide eventually reached 2874.50, 20 points under the overnight high. The open was greeted at this morning’s 2885.00 bias-down signal. The opening 15 minutes of volatility ranged widely (and wildly) between 2879.00-2888.50.

2885.00 was recovered through 10:15 to trigger no-bias, putting into play an offsetting test of its 2899.50 bias-up signal. A fresh high between 10:15-10:30 confirmed the signal, and also made its test likelier during the bias environment.

Actually, 2899.50 was met during the next breath. It was tested and retested while RSIs worked off an overbought condition. Now its reaction down is attacking 2889.00, and anything lower would target 2885.00. While being likely to hold as support, its break could resume the decline.

Closing above Friday’s late 2895.00 high would start to signal a bottom is forming. But closing above Friday’s early 2914.00 high is still needed to signal the trend reversing up.

Overnight dip somewhat recovers.

The 2882.50 overnight low had stopped 1 point short of this morning’s 2881.50 bias-down target. Then it was tested by an opening dip to 2878.00. Both were easily recovered through the opening 15 minutes of volatility to at least suggest sellers weren’t gaining traction.

And this being thinner holiday volume, trying and failing to extend down would likely default to bullish. So the reaction extended up to 2893.00. Both bias-down parameters were recovered to signal no-bias, putting into play offsetting tests of both 2900.25 and 2907.50 bias-up parameters.

Currently a pullback is attacking 2885.00. Back above 2889.25 would start to signal upside momentum remains intact. Meanwhile, a dipping under 2888.00 is “no-bias trending” that requires being retraced, unless the bias environment is exited under its 2881.50 bias-down target.

Volatile reaction to payrolls defines the open’s range.

There were two knee-jerk reactions to the pre-open Employment Situation report. It was greeted at 2904.00 and spiked up to 2915.00. That included almost 3 points of errant ticks. Its immediate reaction back down extended 17 point to 2898.25.

The next reaction can’t be considered knee-jerk because of the elapsed time. But it was almost as dramatic, surging 13 points to test 2911.00.

That’s a lot of volatility to compress into a brief window. Especially pre-open, which inhibits post-open sponsorship. More so, greeting the open essentially unchanged reflects just that, no sponsorship. It took several minutes before starting to firm, ultimately to touch 2914.00 resistance. And it took several minutes there before starting to fall and then test 2903.00.

Still, despite post-open trending attempts finally emerging, another bounce has taken price back to unchanged.

The initial bounce held a test of the 2911.00 bias-up signal, putting into play an offsetting test of the 2900.25 bias-down signal. Testing it this morning should define the window’s lower-end, and then be vulnerable to break lower. Probing it this morning would be required to retrace 2900.25 before being reliable for breaking lower, while being vulnerable to recovering.