Post-open Review

Another failed opening surge.

The 2758.00 overnight high before Europe’s opens was attacked again overnight to within 1 tick. Opening at the 2754.75 bias-up signal was retraced back up to within 1 point of the overnight high. But, similar to Monday and Tuesday’s initial surges, the resolution was down.

Not rallying, but dipping during the open would have been constructive to extending the rally. Instead, sliding back under Monday-Tuesday’s highs to 2748.50 has triggered no-bias. An offsetting test of the 2743.75 bias-down signal is in-play.

The most bearish scenario would bounce again, filling the gap back up to this morning’s 2754.75 open before reversing down. Still bearish would be to exit the bias environment breaking under its 2743.75 bias-down signal. Exiting the bias environment above its 2754.75 bias-up signal would be “no-bias trending,” but still credible for probing a fresh high.

Finally extending, only to hold resistance.

Fresh highs attacking 2752.00 were retraced to attack 2744.00, and to greet the open at 2747.00. Flat-to-higher narrow ranging eventually eked out a surge up to 2752.50. More fresh highs, and an opportunity to trigger the 2751.00 bias-up signal.

Too little, too late? Well, too late, at least. The bias-up signal was still being overlapped at both 10:15 and 10:30 to trigger noN-bias. No bias objective requires a test, and no bias parameter is required to hold.

The setup could have extended higher anyway, which it tried. But already having backed-and-filled, we knew any more backing-and-filling was probably actually a reversal. Which it was.

Now the 2743.00-2747.00 range is being tested as support down to 2746.00. The range may yet hold, and launch an afternoon upleg — which we’d expect to be aggressive and substantial. Otherwise, extending back down under 2743.00 through a relevant timing window like the bias environment’s exit would next target 2736.00.

PROGRAMMING NOTE: Market Wrap will be held early, I’m away from the screens today during the final hour.

Gapping up to 2742.00 ran to 2749.25. Which was retraced entirely back down to 2742.00 during the first hour. The 2741.00 bias-up target was exceeded through 10:15 to renew the bias-up signal. Its renewed 2747.00 bias-up target was met already, and isn’t required to be retested.

Maintaining a break back under 2741.00 as the bias environment lapses would signal momentum reversing down. Breaking back under a lower support would be relevant later — like, exiting the noon hour in negative territory under 2733.50.

Meanwhile, this being a bias-up environment, reacting down has room to its 2735.50 bias-up signal as support without signaling anything more substantial underway. And back above 2744.50 would start to suggest no pullback is coming, that instead the rally is about to resume.

Substantial follow-through already produced.

Multiple (2) similar setups of gapping open and trending substantially intraday had made at least a third similar occurrence likely. Friday’s open gapped up to 2721.50, touched its 2720.75 bias-up target, and then extended sharply higher to 2729.00. The 2727.25 renewed bias-up target was overlapped at 10:15 to avoid renewing again.

That didn’t prevent fulfilling the next higher objective. It just needed a little assist. Reacting down from 2729.00 targeted at least 2721.50, which a quick collapse quickly fulfilled. It was retraced entirely just as quickly, and then extended to 2733.50. The next higher objective was defined as anything above 2733.00.

That was quick. Too quick. The collapse never consolidated before reversing back up. No accumulation or complexity before recovering the prior upleg’s violated pullback limit. Those setups tend to hold the prior high’s setup. Indeed, the reaction down from 2733.50 got to 2725.00.

Any deeper would likely test 2720.75. Being a bias-up environment, there’s room down to its 2714.25 bias-up signal. Maybe in a knee-jerk reaction to a headline, but otherwise I don’t expect its test this morning. Meanwhile, back above 2730.50 would at least target a fresh high before sellers try to retake control again.

Late pre-open break has tested supports.

Late pre-open breaks from narrow directionless overnight ranges are often fully retraced back to their origin, much sooner rather than later. That’s our anticipation for this morning’s drop from 2727.00 down to 2716.00. Especially after also anticipating the break would extend down to 2715.00 and potentially 2711.00, and has.

I reiterated these downside objectives in my last-minute update to the chaRTroom. I also noted that we don’t know which if either of 2715.00 or 2711.00 would launch the break’s recovery, or how the break’s complete recovery would then resolve. Price action on the way back up should be clues informing the latter.

The 2718.75 bias-down signal has triggered. Its 2710.50 bias-down target has been met to within 3 ticks. It could be met entirely, but won’t become “unfinished business below” if left outstanding. Meanwhile, this is still a bias-down environment, and the morning may break lower still.

Recovering the 2718.75 bias-down signal through the bias environment lapsing would bullish, especially if confirmed above 2721.50. The minimum objective would be to retrace the pre-open break, and potentially to resume yesterday’s rally.