Post-open Review

Restrained optimism absorbs impatient selling.

The wide overnight range around yesterday afternoon’s 2654.00 high was actually centered around 2648.00. Which is also the opening print. A blip-up to 2651.00 resolved down. Or, tried to resolve down. Repeatedly. Dips to 2643.00, 2641.00, and ultimately 2638.50 each recovered to 2648.00.

The last recovery was during the opening 15 minutes of volatility lapsing. Its timing suggested that sellers had failed. The reward for absorbing them was to retest their origin at 2651.00.

This being a renewed bias-up environment, the post-open rally is free to extend. It has. The overnight high is being attacked to within 1 point at 2657.00.

Already probing prior highs through the open would have been likelier to maintain traction, and to extend higher. Reactions down would have been likelier to recover. This morning’s rally may extend higher and recover dips, but sellers aren’t marginalized. Whether or not distracted by the Zuckerberg testimony, there will be vulnerability to reversing back down intraday.

Overnight rally finally extends… to resistance.

Gapping up at the 2620.00 bias-up signal reacted down to attack 2613.00 through much of the opening 15 minutes of volatility. That was still above Friday’s highs, and it only stretched the rubber band, which snapped back up. Overnight highs were probed by a point up to 2629.00.

Reacting down into the 10:15 bias timing window attacked the 2620.00 bias-up signal as support. But bias-up triggered cleanly. Trending back up through the bottom of the hour probed the 2630.50 bias-up target up to 2635.25.

That’s testing Friday afternoon’s 2634.25 high. Gapping up above it would have been credible for triggering a session-long rally setup. Now it’s just resistance. In fact, RSIs just diverged negatively into its retest. Back under 2630.75 would now be likely to test 2627.50.

None of which prevents extending higher anyway. A fresh high could trigger another short-squeeze through the top of the hout. But back under 2627.50 would start to signal that this morning’s rally was unwinding, at least likely to fill the gap back down to Friday’s 2604.00 close.

Recovery extends, until defensive posturing resumes.

The overnight recovery to 2649.00 had been retraced to 2634.00 before the Employment Situation report. Its reaction attacked 2649.00 to within 1 tick, then greeted the open 10 points lower. The open surged from there until testing the 2656.00 bias-down signal as resistance.

And since testing the 2656.00 bias-down signal as resistance, the market has dropped from there.

The 2647.25 bias-down target was still being tested as support at 10:15, so bias-down wasn’t renewed. But it’s still a bias-down environment, now probing 4 points under the 2634.00 area where the Employment Situation report was greeted.

Nothing requires this morning’s drop to extend, or precludes it from closing back above 2644.00. But closing under 2644.00 is still likely to be by a wide margin, and then also likely to extend into Monday’s open. While buyers aren’t marginalized in this pattern and could still retake control, I suspect they won’t.

Recovering back above 2647.25 through a relevant timing window would help the bullish scenario — especially if recovered after the reaction China’s retaliation has been absorbed.

Choppy open holds the pre-open range.

The open immediately broke under 2660.00 and extended down to 2651.00. That took longer than the opening 15 minutes of volatility, and still held the overnight Head & Shoulders pattern’s neckline. Breaking any lower would be too late to ensure recovery.

But there was no break any lower. The rubber band had not been stretched deeply enough to snap back up. Bouncing back into the range hovered around the open.

Still hovering around the open. Bias-up triggered, and was renewed by also exceeding its 2656.25 bias-up target through 10:15. Its renewed bias-up target at 2644.00 doesn’t require being met. But any reaction down during the bias environment must be defined or contained by the 2647.50 bias-up siganl.

Rallying into and out of the open.

The last overnight downleg was a plunge to 2559.50, which had originated from a Symmetrical Triangle. The pattern tends often to break falsely in one direction before reversing more substantially in the opposite direction. Being an overnight pattern, its influence had to be obvious through the opening 15 minutes of volatility to be influential intraday.

In fact, the triangle’s upper-end was retraced entirely up to 2581.50 before the open. But it was fresh post-open highs that confirmed a bigger reversal underway. And by any measure, the triangle’s false break was exceeded by rallying to 2595.00.

Meanwhile, 2595.00 is this morning’s bias-up signal. And it triggered (late after invoking the grace period). Its 2585.75 bias-down target is already met, so it won’t become “unfinished business below.” But 2595.00 should still define the window’s upper-end, or else require being retraced.

In fact, 2595.00 is being probed right now up to 2601.00. It requires being retraced. Actually reversing back under 2593.00 would start to signal this morning’s bounce had ended and is reversing back down. Otherwise, extending the rally this afternoon would target a retest of yesterday afternoon’s overbought RSIs at 2618.75.

BONUS: Here’s a video description of the Symmetrical Triangle’s setup, and the overnight influence’s setup:

https://ilos.video/gIYi77