Post-open Review

Post-open dip recovers to fresh highs.

The open’s active templates were likely either to extend the overnight rally immediately, or else correct it a little first. Extending the overnight rally to 2699.50 didn’t make either template likelier. The extra push higher could help to trigger a post-open short-squeeze. Alternatively, or else the added room allowed expending more selling pressure without it damaging the chart.

The open did dip down to 2692.50, and then recovered all but 1 tick up to 2699.25, all during the opening 15 minutes of volatility. Consolidating there has broken higher to 2701.50.

1-minute RSI has avoided returning to overbought. That can reflect restrained optimism, especially as price continues rising. Usually then, an eventual price surge takes RSI overbought, and an actual peak or pullback can develop. The next higher objective meanwhile is 2705.75.

Back under 2696.25 would start to signal a deeper reaction down. There’s room down to 2685.00 before threatening not to close positive above 2681.50. Until then, any pullback is assumed will recover, and set-up an interesting WedEX tomorrow afternoon.

Relief rally isn’t being rejected. Nor extended.

Last night’s 2672.50-2677.50 open had retraced before Europe’s opens down to 2660.50. It was all recovered before the open up to 2678.75. Actually opening back under the earlier 2677.50 high began another retracement, this time down to 2666.00 before bouncing.

Very gradually, the post-open dip has been recovered to the 2676.25 opening print. The 2672.75 bias-up target wasn’t recovered in time to renew the bias-up signal, but this is still a bias-up environment. A retest of Friday’s 2680.50 opening high is likely, up to 2681.50.

Back under 2671.50 would start to signal the range is resolving down. A downleg prior to probing last week’s highs wouldn’t likely gain much momentum. But reacting down from fresh highs could find a massive rubber band stretch being snapped back.

Overnight recovery and post-open high reverse down sharply.

We’ve come a long way from being willing to consider sell signals this morning. Sell signals have triggered, and price has reversed down, a lot.

A property of the “session-long rally” setup is that fresh highs should be probed the following morning. That may have seemed unlikely when the close collapsed 12 points to 2662.00, and when overnight action extended down another 10 points to 2652.00. But rallying from midnight through the open got to 2680.50.

Follow-through fulfilled.

That high is within 1 tick of this morning’s 2680.75 bias-up target. Its reaction down to 2661.00 through the bias timing window avoided triggering the 2672.00 bias-up signal. Rejecting the bias-up signal puts into play an offsetting test of the 2654.00 bias-down signal. Rejecting the bias-up target, too, puts into play an offsetting test of the 2648.25 bias-down target.

Already, the 2654.00 bias-down signal is being attacked to within 1 point. Oversold RSIs at the low require its reaction to fail. And it is reacting, back up to 2661.00. Almost any lower could find an air pocket or two that are unable to offer support for awhile.

Session-long rally setup triggers, over-extends.

Session-long rally has triggered. Gapping up above yesterday afternoon’s 2655.00 bias environment high was half the battle to actually recovering it, forming the session-long rally setup. Extending to 2661.00 magnified the Just holding on to the gap up halfway through the opening 15 minutes of volatility made it much likelier to be maintained all the way through 9:45. So, the upside was magnified again by surging to 2667.00. The rally extended even after the opening 15 minutes of volatility had lapsed, attacking and piercing 2671.00.

Potential to 2672.00 was fulfilled to within 2-3 ticks. All but fulfilling the near-term objective, and fulfilling it so quickly, became vulnerable to a corrective dip. Being a session-long rally, pullbacks are likely to be either brief or shallow, but in either case likely to be recovered to fresh highs. A 10-point pullback to 2661.25 may have been enough. Back above 2667.00 would start to signal momentum reversing up.

Also for being a session-long rally, each timing window should probe above its prior timing window. With one exception — usually the noon hour. When not the noon hour, then usually the final hour, which can reverse direction dramatically. Closing above 2672.00 would put into play 2715.00-2722.00. Meanwhile, probing above 2672.00 intraday would not yet imply the rally is durable.

Overnight drop rejected, barely.

The overnight drop has been rejected. The hours-long consolidation at this morning’s 2640.25 bias-down target had broken sharply lower to 2626.00. Price action around the low formed an Inverted Head & Shoulders pattern. My pre-open update in the chaRTroom noted the pattern’s potential to break falsely in one direction, and then reverse more substantially in the opposite direction.

But being an overnight pattern, its reversal had to develop during the opening 15 minutes of volatility. After that, the overnight pattern’s properties won’t apply intraday.

Greeting the open at the 2640.25 bias-down target, i.e. resistance, was the optimal opportunity for reversing back down. But it held. After not responding to resistance, the opening 15 minutes of volatility extended higher. Sellers were all but marginalized.

The 2649.00 bias-down signal’s test within 3 minutes of 10:15 invoked the grace period. Extending higher through 10:30 to 2654.00 has triggered “late no-bias.” Rejecting tests of both bias-down parameters puts into play offsetting tests of both 2663.00 and 2670.50 bias-up parameters. Their tests aren’t required, since the bias triggered late.

The gap back to yesterday’s 2655.00-2656.50 close may offer resistance. It’s also an attraction, and still likely to be probed up to at least 2663.00. Any more upside would be difficult, with the Zuckerberg hearing underway. Retracing or backing-and-filling would be credible, but not reversing the trend back down.