Post-open Review

Choppy sideways ranging trying to break lower.

The overnight rally first tested 2634.00 3-1/2 hours before the open. Its reaction down and two slightly higher highs were interrupted by dips to 2626.00-2627.00. One more fresh high through the open attacked 2640.00, and also dipped to 2626.00-2627.00.

Then deeper.

The last reaction down has extended to test 2620.00. That was the first consolidation of Friday afternoon’s break under its morning lows. And this is the first probe under 2626.00-2627.00 in more than 4-1/2 hours. It is a big decision point:

Maintaining this morning’s open back above Friday morning’s lows had formed a sort of Isolation setup. Maintaining this break back under those lows would invalidate the setup, and its recovery attempt. But recovering those lows through the bias environment exit would maintain the Isolation setup, and potential for fresh highs today.

Isolation setup stakes its ground.

The 2644.00 overnight high had been reversed out of Europe’s opens to retest 2627.00. Retracing 61.8% of the drop suddenly surged to attack 2651.00. Its retest was accompanied by RSIs diverging negatively, triggering a reaction down to test 2642.00.

A very important level.

The attempt to recover yesterday’s range was underway. Rallying into and out of the open attacked 2659.00. It was retraced entirely to retest 2642.00, but only to 2644.00 during the opening 15 minutes of volatility.

The isolation setup had formed. Also, the 2640.75 bias-down signal held its post-open test, putting into play an offsetting test of the 2659.75 bias-up signal. Which has been attacked to within 1 point.

Price action has since ranged between 2642.00–2655.00. The isolation setup’s reward usually isn’t obvious during the morning. But a probe into negative territory must be quickly rejected. Extending to fresh highs remains likely, as does rallying this afternoon, so long as 2639.75 holds as support.

Fresh pre-open lows lead circuitously to fresher post-open lows.

The overnight dip attacking 2695.00 and consolidating around 2701.50 had broken lower to 2684.50 far before the open. An isolation setup became impossible. Alternatively, the open began tracking a path I had outlined during my live pre-open update in the chaRTroom — blip-down, then reverse back up into a morning-long rally. Otherwise, sharply lower lows would be likely.

The post-open blip-down barely touched 2680.00-2681.00 support before reversing back up. The opening 15 minutes of volatility got to 2693.00. Reacting down to attack 2684.00 was too deep, already signaling momentum had reversed down. And undoing the recovery template.

Until it didn’t. And then until it did, again.

Another upleg nevertheless tested 2698.00. Despite coming after the last retracement, extending almost any higher would have reinstated the recovery template. But as if to compensate for the detour, those sharply lower lows came fast, sliding 25 points to 2672.50.

So long as 2680.00-2681.00 isn’t recovered, the trend remains down. An important support will have been broken. A test of 2652.00-2653.00 would be all but required. Back above 2680.00-2681.00 could otherwise be the last opportunity to prevent trending down even deeper into and out of the weekend.

REMINDER: I’M AWAY FROM THE SCREENS TODAY BETWEEN 11:15-12:45 ET.

Not without trying, this morning has triggered no-bias. And having held a test of the 2719.00 bias-down signal — thorough testing — an offsetting test of the 2725.25 bias-up signal is in-play. Back above 2720.75 would help to confirm its invalidation attempt had failed.

It’s too late to trigger bias-down or to invoke the grace period, but a dip is probing under 2719.00 now by 2 points to try invalidating the signal. Still overlapping it at 10:30 won’t affect the 10:15 signal. Probing lower would be “no-bias trending” requiring its recovery.

But back under 2719.00 cleanly at 10:30 would invalidate the no-bias signal and its upside objective. Fresh lows this morning for whatever reason could still neutralize the 2710.25 “unfinished business below.” Doing it before or into this afternoon’s FOMC to trap weak-handed shorts to fuel a bullish reaction.

Post-open selling still holding support.

The 2726.25 bias-up didn’t trigger, despite being tested thoroughly during the open up to 2727.75. An offsetting test of the 2710.25 bias-down signal is in-play. Usually.

Usually? I’m a little skeptical because all of the bias timing window’s price action through 10:15 was above yesterday’s 2716.25 cash session close. Which was touched twice overnight and held. So, I’ve been discussing my skepticism in the chaRTroom, while also being suspicious that the bias-up signal would trigger.

Bias-up didn’t trigger, and fresh post-open lows were probed… down to touch 2716.25. And as I’m writing, its reaction back up to 2721.00 has extended up sharply to attack the 2727.75 post-open high.

It’s too late to trigger bias-up. And it’s both too late and too early to invalidate no-bias. Exiting the bias environment above its bias-up target would still do that. Otherwise, 2710.25