Post-open Review

Pre-open pullback extends post-open.

The overnight rally extended to test and retest 2735.50, while RSIs diverged negatively. Its reaction greeted the open at 2729.75. Buyers needed to retake control immediately if they were going to retake control at all this morning. They didn’t, and the pre-open reaction down extended through the first hour to test 2723.00.

Now 2721.50 is being touched.

This is still a bias-up environment, with room down to its 2718.00 bias-up signal that should define the window’s lower-end if tested. When the window comes withing view of lapsing 10-15 minutes before 11:30, the 2718.00 bias-up signal would then be free to break lower.

Back above 2729.00 would start to signal the morning’s drop was contained, and momentum was reversing up. Otherwise, except for obligatory support at the gap back down to 2712.00-2714.00, there is minimal support on the way down to the range’s lower-end.

Clinging to the bias-up target.

The overnight rally ultimately touched 2741.50. That’s essentially the 2740.75 renewed bias-up target. But the bias-up signal wasn’t renewed, instead holding at or under the 2735.50 bias-up target through 10:15. The 2730.50 bias-up signal did trigger, so it should define the window’s lower-end if tested…

…on a normal day. Which today is not, being an early close.

So, back above 2736.75 could attack or retest the overnight high, possibly even test the range’s ~2745.00 upper-end. Breaking above it continues to be less likely than simply ranging sideways, as this morning seems intent upon.

Exiting the bias environment under 2730.50 could still extend down. Breaking at any time under 2730.50 could still extend — again, not a normal day. But rallying is less likely.

Open’s attack on overnight low reacts up.

The 2698.50 overnight low’s reaction up to 2710.00 held. Retracing only 38.2% of the overnight drop from 2728.00 reflected excessive pessimism. This made extending down more difficult than from a 61.8% correction. But it could be done.

It wasn’t.

2700.50 was quickly touched and recovered by increasingly wider swings, eventually touching 2716.00. Which is within 2-3 ticks of the overnight drop’s 61.8% correction. Levels not recovered include:

• 2711.00 …The bias-down target maintained its break to renew the bias-down signal, next targeting 2704.00. Which was already touched, so retesting it during the bias environment would likely break lower, too.
• 2704.00 …Holding as resistance through the opening 15 minutes of volatility at 9:45 creates a position of weakness. It can’t prevent trying to bounce, but should doom to failure any bounce attempt.

Speaking of which, about that bounce to 2716.00. It’s struggling now, but extending would target 2723.50. Its origin would still be from a position of weakness, dooming it to failure, likely to reverse down or not even recover above 2716.00.

Back under 2710.50 would signal the bounce already failing, targeting 2704.00 and potentially a more substantial break below.

Gap up extends.

The overnight high’s pullback to 2723.00 was recovered to 2734.00, but still almost failed to gap up above yesterday’s 2726.25 high. Surging into and out of the open did extend to fresh highs at 2740.50. That was the renewed bias-up target, which held through 10:15.

This being a Friday, the morning’s bias signal tends to persist through the noon hour. Renewed, or not, holding the bias-up target’s test through 10:15 is difficult to extend. It’s also difficult to reverse if extended. But there’s still room back down to the 2727.00 bias-up signal during the bias-up environment.

Extending through 2740.50 would next target 2743.00 and 2746.50. More importantly, an afternoon downdraft would become much more difficult. Meanwhile, almost any bearish scenario today depends upon reacting down from 2740.50 to 2727.00. Extending under 2723.00 would likely close under 2718.00 — probably by a lot.

Late pre-open break reveals excessive pessimism.

Breaking an overnight range within 60-90 minutes of the open tends not to extend. At least, not until retracing the break. So, this morning’s last plunge from 2716.00 down to 2693.25 was likely to retrace back into the overnight range. Already testing the morning’s 2694.25 bias-down target’s support helped.

Bounce potential up to the 2711.00 bias-up signal was not attractive. Just touching 2707.25 was enough to launch a drop down to 2694.25 — it was the bias-down target’s first intraday test. And it held. But the 2707.25 bounce was only attacked before dipping again. And the 2700.00 bias-down signal’s test wasn’t resolved, triggering noN-bias.

Meanwhile, the ongoing volatility had started appearing at a granular level within the narrow range. Inflection points were probed no further than their first 3-4 minutes before reversing sharply. It continues to this minute, still overlapping 2700.00 by points in either direction.

Regardless of this being a noN-bias environment, holding two post-open tests of the 2694.25 bias-down target and exiting the bias environment above its bias-down signal could be bullish. Could be, because already testing the 2711.00 bias-up signal without recovering it would be bearish. Exiting the bias environment back under 2700.00 could simply resume the decline.