Post-open Review

No apparent appetite for risk.

The open’s gap up was under prior highs. So, a reversal down won’t be required to retest it. Actually, a reversal down never really materialized. But it took a long time before trending developed.

Trending did develop. Or, at least an attempt. Fluctuating around the 2792.50 bias-up signal finally triggered it. that has extended to a fresh post-open high at 2795.00. But there seems to be no rush in extending.

Nevertheless, this is a bias-up environment. Fresh post-10:15 highs are already printing, which reinforces the signal. Nevertheless, back under  2791.50 would start to suggest a sooner downdraft.

Actual intraday recovery holds on.

Bounce after bounce after bounce overnight repeatedly recovered yesterday’s late 6-point drop under its 2790.00 sell signal. Each bounce was followed by another drop. So many bounces and recoveries that the setup’s likely intraday recovery (for having originated so late) could have been dismissed. But, no need for that, since the last overnight dip was also recovered to open back above 2790.00.

Which once again stopped recovering. But unlike the repeated overnight drops, the post-open reaction down was limited to 2786.00. That’s natural support at yesterday’s close, and it has held.

This morning’s 2790.25 bias-up signal also held as resistance, putting into play an offsetting test of its 2782.00 bias-down signal. Having invoked the grace period at 10:15, no-bias triggered late. Without yet producing a fresh post-open low, its downside objective can be invalidated by exiting the bias environment at fresh post-open highs — at least, above its bias-up signal.

A fresh high post-open high would likely also retest yesterday’s 2794.25 high. Otherwise, the downside objective would become “unfinished business below,” likely to attract more selling pressure.

Bias-up signal attracts, then holds.

Reacting down from the 2786.50 overnight high had itself attacked 2779.00. And that was recovered to greet the open at 2784.00. That ended the potential for rejecting last night’s probe above prior sessions’ highs. In fact, the pre-open recovery extended post-open to fresh highs at 2788.25.

Which offered another opportunity to reject a probe above prior sessions’ highs. A pullback was recovered back above 2788.00, and then another pullback recovered. The 2786.50 bias-up signal was still being tested at both 10:15 AND at 10:30 to trigger noN-bias. The bias-up target is not in-play, and the early probe above prior highs can be rejected.

Of course, having avoided a clear rejection of the 2786.50 bias-up signal means an off-seting test of the bias-down signal is also not in-play. The early probe above prior highs can be rejected, and back under 2784.00 would signal a reversal underway.

Bullish setup formed, paused.

The probe under yesterday’s 2763.75 lows was isolated to the overnight. In fact, the 2768.75 open only reacted down to 2767.00, avoiding even a 61.8% retracement of the Double Bottom that had formed at yesterday’s lows. So, the Isolation setup is intact. Its resolution up rarely develops immediately, but it should meanwhile hold support.

Also, the 2768.25 bias-down signal avoided triggering. This puts into play an offsetting test of the 2778.50 bias-up signal.

Meanwhile, the open hasn’t resolved up. Not for lack of trying, having bounced to 2773.50. But  its 2772.75 inflection point was only overlapped, and now a reaction down is probing a couple of points under the 2768.25 bias-down signal. The dip’s goal is to find strong-handed buyers, and the pattern is otherwise likely to resolve up.

Another opening surge gets swallowed whole.

Pulling back from overnight highs still held on enough to gap up. And that gap up recovered back to the overnight high, essentially. Then price collapsed, back down into yesterday’s range. That’s four times this week, every day. The pattern reflects distribution — stronger-handed sellers increasingly taking advantage of rising prices.

This pattern can persist indefinitely on the way to higher and higher highs. But it usually doesn’t. More and more strong hands tend to begin adopting the same pessimism. Which eventually leaves only the weakest hands holding long.

This pattern tends to end when it becomes too difficult to conceal. Collapsing 13 points within a half-hour is among the largest post-open reactions — not the largest, but the fastest.

This pattern can be most bearish when it leaves no unfinished business above. The 2780.25 opening gap was retested already from below, before rallying to within 1 tick of the 2783.50 overnight high. Nothing above requires a retest.

Nevertheless, there’s a bounce is underway. That fast collapse was actually the no-bias signal fulfilling its objective for an offsetting test of the 2771.25 bias-down signal. It was exceeded by a single sentiment extreme of 8 errant ticks. Recovering 2772.75 and 2775.25 could attack the open’s highs. But back under 2771.25 could launch another collapse, and prevent confirming yesterday’s breakout.