Post-open Review

Obligatory high, attracts no reinforcements.

Attacking yesterday’s 2739.25 high overnight to within 1 tick was not pessimism. Stopping short overnight is not pessimistically short, because overnight can’t be compared so directly to intraday action. But it was a retest. And it was ongoing right before the open. No longer being overnight, but pre-open, it had become ineffectual pessimism.

An obligatory fresh high had become likely. Maintaining the fresh high depended on whether reinforcements would be attracted. They weren’t.

Quickly surging to touch the 2741.50 bias-up target quickly held. Bias-up target tested and held. Another bounce also failed, and resolved down to 2733.00. The 2735.25 bias-up signal’s grace period didn’t recover, so this is a no-bias environment, whose target has been  met.

Still testing 2733.00 is delaying something, but what. Holding the bias-down signal’s test would have targeted new highs. Holding clean tests both bias-up parameters puts into play an offsetting test of both bias-down parameters.

Bearish WedEX might only define a pullback.

The WedEX setup’s influence should begin no later than 9:15. Which means sentiment until then can trend in the opposite direction. Which this morning’s open did.

The intraday crowd often duplicates any extreme overnight action, even if only momentarily. So, the post-open surge was not surprising. Surging 8 points from the 2729.00 open probed a buy signal above 2730.75, tested its likely 2434.75 target, piercing both it and the overnight high.

Peaking by halfway through the opening 15 minutes would have been optimal. Peaking at 9:45 is acceptable, if not also confirmed by then reacting down 6 points to attack 2731.00. Pretty productive. Until it wasn’t.

All of the elements for a bearish WedEX were intact through the open. A fresh high that is not only retesting the 2737.00 9:45 sentiment peak would invalidate the setup. And right now, the 2737.00 9:45 sentiment peak is being retested up to 2738.75.

If it’s any more than just a retest, then the setup can be as bullish as it would have been bearish. Back under 2734.75 would otherwise signal a steep, deep reversal down underway.

Pre-open slide puts the session on defense.

I recorded this morning’s Market Tour while the 2727.00 overnight high’s retest was reacting down several points. The reaction became a steep slide down to 2712.00. The open held its bounce potential up to 2718.50-2719.25 before finally reversing back down to the 2712.00 pre-open low.

But rather than fall off the cliff, surge retested 2719.25. The 2715.00 bias-down signal had already invoked its grace period, and the surge made no-bias likely. The surge’s catalyst was a news headline that’s likely to be retraced, but not quickly. In fact, late no-bias triggered late.

Or, did late no-bias trigger too early? Only one minute later, the 2715.00 bias-down signal was breaking lower. Hard. One minute earlier would have triggered noN-bias, and 2-3 minutes earlier would have triggered late bias-down. In fact, the 2708.00 bias-down target has been met to within 3 ticks, so even a timely bias-down would leave no “unfinished business below.”

But, what above that late no-bias — and more specifically, what about its offsetting test of the 2725.25 bias-up signal? Late signals aren’t required to meet their objectives. But they become likelier if not rejected. And now 2715.00 is being recovered as the bias environment starts lapsing. It’s an unusual situation, but there’s still a window for upside before this afternoon’s bearish WedEX influence arrives.

Pre-open and post-open sellers get trapped.

My pre-open chaRTroom comments pointed to the ongoing pre-open retest of yesterday’s late 2715.25 low as forcing a make or break situation for sellers. Patient sellers could have made it, by maintaining a shallow post-open break. Strong-handed sellers could have made it, by maintaining a deep break. But the deep break down to 2713.50 came so quickly that it inhibited selling at already deeply discounted prices. So, without attracting reinforcements, the earlier impatient sellers proved themselves to be weak-handed.

Holding the 2715.75 bias-down signal’s test through 10:15 would put into play an offsetting test of the 2725.75 bias-up signal. But the reaction had already tested and held the bias-up signal at 10:15. This is a no-bias environment. A later surge to fresh highs had failed by 10:30 to avoid invalidating it.

Which means this later probe even higher up to 2731.00 is “no-bias trending” that requires being retraced back down to the the 2725.75 bias-up signal… at least. RSIs are overbought at the current high, so reversing down isn’t yet likelier. That can change momentarily.

That can also extend higher. This is unlikely before late afternoon, even if a bigger recovery is coming then. So, trying to reverse down prematurely could correct the rally before it extends up after exiting this afternoon’s bias environment.. Neutralizing the overbought RSI could reverse the trend back down.

Rallying into and out of the open.

The overnight blip-up to 2714.75 was ultimately retraced back down to the earlier 2704.50 low.* But the open was greeted back up at 2711.00-2712.00 resistance.

Having reacted down from there already, we already knew that simply retesting it during the opening 15 minutes of volatility would be bullish. In fact, a buy signal there immediately triggered at the open, extending up to 2719.50.

Reacting down to 2713.00 and recovering created legs that overlapped the 2716.25 bias-up signal at both 10:15 and 10:30. So, this is a noN-bias environment. The bias-up signal need not define this window’s lower-end, and an offsetting test of the bias-down signal is not in-play.

Trending during a no-bias or noN-bias environment often isn’t sponsored by strong hands. That’s why trending during these environments is done less often. Trending anyway without reversing is also done less often. Trending this morning would more likely be retraced.

Trending this morning may also be reversed. *That pre-open dip back down to 2704.50 was similar to the dip before Europe’s opens — defensive posturing. Like the recovery overnight that was retraced back to the lows, this morning’s recovery may expend its buying pressure satisfying weak-handed buyers, and find no sponsorship to defend against reversing down. We can give the recovery attempt a benefit of the doubt anyway, which could extend up to 2735.50.