Post-open Review

Holding at resistance, not rejecting it.

Yesterday’s post-open highs held tests of the 2708.00 area as resistance. It was the morning’s calculable bias-down target. Last night’s rally held the 2708.00 area as resistance, too. And its reaction down to 2698.75 was recovered to test the 2708.00 area.

Repeatedly. Eventually, a higher high became at least obligatory. The objective already measured out to 2711.00. And now that is being fulfilled by an 8-point surge up to 2715.00.

Recall that the rally from yesterday’s lows has room up to 2715.00 while still being considered a corrective bounce. The 3-minute RSI has finally touched overbought territory but not very compellingly. Back under 2711.00 would start to signal the corrective bounce is done so momentum can start reversing down.

Extending higher anyway would still leave “unfinished business below” at the gap down to yesterday’s 2688.50-2692.00 close. But another run at last week’s highs above 2733.00 would be possible, first.

Post-open bounce can’t recover bias-down target.

The overnight drop to 2690.25 had bounced  to 2705.50 before the open. Its reaction down through the open eventually touched 2697.00. But even after the first 15 minutes of volatility had lapsed, the overnight drop had not yet resumed.

So, a bigger bounce tested the 2708.00 bias-down target as resistance by 1 point. It held through 10:15 to renew the bias-down signal. Its renewed bias-down target isn’t required, but it’s likely. With some obligatory support likely upon retesting the 2690.25 overnight lows, the next lower objective is effectively 2679.00-2683.50.

The next lower attraction would officially be in-play if this morning’s bias environment were exited under the open’s 2697.00 low. Meanwhile, we still expect bounces to fail, like the post-open bounce to 2709.50 that has reacted down to 2701.25.

Pre-open slide crowds out post-open sellers.

Having probed yesterday’s highs overnight, opening under the earlier overnight low often signals the trend reversing down. Last night’s probe above 2730.50 reacted down under what had been the 2726.75 Globex low.

Then it extended much deeper to 2716.25. And that was down from the 2737.75 overnight high. That’s a lot of selling pressure to expend, inhibiting post-open reinforcements. And its European sponsorship would begin focusing on the impending weekend.

An opening surge did reverse down sharply from its 2722.50-2723.25 resistance as expected. Stopping optimistically short of touching pre-open lows was nevertheless exploited by a bounce that has avoided triggering the 2721.50 bias-down signal. Now an offsetting test of the 2730.75 bias-up signal is in-play.

Now a dip is testing the 2721.50 bias-down signal as support. Back above 2723.00 (being tested now) would start to signal the recovery has resumed. Fulfilling the upside objective early enough would allow another downdraft into the weekend. Back under 2720.00 could leave “unfinished business above” in favor of resuming the pre-open decline.

Non-market headline kills recovery.

This morning was likely to probe above yesterday’s 2733.00 high. So long as overnight action had not already the trend down, and so long as any pre-open dip was recoverable, some upside follow-through was all but obligatory. “Some” upside follow-through, meaning that it would be either durable or rejected.

Already retracing 61.8% of the overnight dip’s recovery down to 2725.25 was constructive. Fresh highs would have been more durable, but still vulnerable to reversing down. Already, 2730.50 was being tested just 2 minutes away from exiting the opening 15 minutes of volatility.

Then came the headline cancelling the N. Korea meeting. The knee-jerk reaction down to 2722.00 was extended by a plunge to 2714.00. Its reaction up barely touched the 2720.75 bias-down signal as resistance, and held it in time to trigger.

This drop’s catalyst is artificial. It crowds out what could have been organic selling from patient sellers awaiting those obligatory fresh highs. So, the question now is which path follows: Will the drop attract enough speculative buyers exploiting the non-market related price discount, or is the drop so deep that patient sellers have accelerated their plans. The latter could still resolve bullishly, but not soon.

Despite RSIs diverging positively on a retest of 2709.75, a break lower just touched 2706.00. Back above 2712.00 and 2715.50 would start to signal momentum reversing up. Otherwise, exiting the the bias environment under 2711.00 would suggest the bigger decline has already resumed.

Overnight drop finds post-open buyers.

My last comment before the open was that it’s being greeted not between a rock and a hard place, but above it. The overnight dip to 2704.50 had bounced back to 2711.00, where a post-open surge touched 2714.00. Overlapping dips up to 2716.25 eventually broke higher to 2721.25.

That’s right. Yesterday’s low. Natural resistance.

Overlapping the 2718.50 bias-down signal in time to invoke the grace period ultimately retraced it to trigger late bias-down. Already, its reaction down is 2 ticks away from fulfilling room for a retracement down to 2711.00.

Holding an intraday test of 2704.50 would be a lot more bullish than avoiding its test altogether. Recovering 2717.00 through the close would be a lot more informative than the open. More predictive, too. Meanwhile, the 3-day holiday weekend’s influence doesn’t even begin until today’s close.