Post-open Review

Open’s weakness sets bearish context for rally.

Upon probing yesterday’s 2787.75 high post-open, the rally required exiting the open above it, preferably also trending higher. But the open’s touch of 2791.00 reversed down throughout the opening 15 minutes. And it extended down to 2782.75.

The likelihood for support at 2784.00-2785.00 was identified as likely to push back. It did more than that, recovering the opening drop’s 2791.00 origin.

The opening drop’s recovery never corrected along the way, and no accumulative pattern had formed. This only adds to the position of weakness already formed by having trended back down throughout the open under relevant support.

None of which has prevented extending up to 2794.50. All of which dooms the post-open bounce to failure. Already, a detached bar at the high has triggered a reaction down attacking 2788.00. Another fresh low would likely extend to fresh post-open lows, if not also repeat yesterday afternoon’s decline. Fresh highs would target 2795.75 if not also 2797.00. And still be vulnerable to failure.

Pre-open and post-open reactions down are recovering.

Resistance at 2784.00-2785.00 was likely to reverse momentum back down if tested early enough. In fact, attacking it to within 2 ticks before the open was quickly reversed 8 points down to 2775.00. And tests of 2784.00-2785.00 after the open reacted down, too.

But not 8 points.

Still overlapping the 2782.00 bias-down target at 10:15 avoided renewing the bias-down signal, which has been rewarded by an attack on 2788.00. But overlapping 2782.00 is not the same as holding it decisively, and it’s still a bias-down environment, so sellers aren’t marginalized. And now 2782.00 is being retested as support.

Exiting the bias environment above 2784.00-2785.00 would start to suggest what the open failed to establish — that the overnight drop has been absorbed. Otherwise, the pattern remains vulnerable to attacking the overnight low down to 2768.50, if not also probing it down to 2761.00-2762.00.

Triggering bias-up.

Another overnight test of 2788.00 would not have been bullish. It was attacked to within 1 tick, which is borderline, but it held. Vulnerability to a post-open test of 2788.00 couldn’t be dismissed, and could still be dealt with bullishly if done early enough. It was only attacked to within 1 point at 2789.00.

The overnight dip to 2788.00 had recovered to 2794.50. That’s being pierced now by 1 point up to 2795.50. The 2789.75 bias-up signal is triggered and confirmed. Its 2797.50 bias-up target is in-play.

Invalidating the bias-up target requires exiting the bias environment back under its 2781.75 bias-down signal. Meanwhile, just dipping back under 2790.50 would start to signal a deeper pullback underway, anyway.

Fresh post-open highs still hovering above overnight highs.

The sideways range between 2770.00-2775.00 that began at midnight persisted right up to the open. Picking the resolution from a standing stop is rarely reliable. Especially not when fluctuating narrowly around a relevant level, like this morning’s 2772.50 bias-up target.

The open did immediately surge and extended to test 2777.25 up to 2779.00. Still testing 2777.25 when the opening 15 minutes of volatility lapsed — and not exceeding or reacting to it — offered no new clues. But a lone detached bar did suggest near-term buying pressure was peaking, and a reversal attacked 2772.50 to within 1 tick.

2772.50 held, renewing the bias-up signal. Its 2777.25 renewed bias-up target was already tested, and now it’s being retested. Extending above 2778.00 would start to signal the rally is extending, confirmed above 2780.00. Back under 2774.25 would signal a deeper retracement underway, likely targeting Friday afternoon’s “lower prior highs” down to 2761.00-2762.00.

Pre-payrolls pessimism’s pop-up proceeds patiently, persistently.

The bullish scenario I described during the Market Tour was that testing the earlier 2732.75 overnight low reflected pessimism. And pessimism into a known-event like the Employment Situation report is potentially bullish from a contrarian perspective.

The test had touched 2731.25 before greeting the news at 2733.00, which spiked up to 2744.50. Its pre-open retracement blipped-down briefly post-open to 2734.50, then started recovering. The 2740.75 bias-up signal was triggered, the reaction’s 2744.50 high was recovered, and now the 2747.50 high has been touched.

The 2749.00 bias-up target is in-play. Extending any higher would target the low 2750‘s and potentially also probe above 2760.00. One impediment to extending higher is the open’s delay recovering decisively, which would have been preferable in this scenario. So, sellers aren’t marginalized, but the burden of proof is still on them.