Post-open Review

Another dip recovered.

The 2740.50 bias-up target was probed overnight by more than 6 points. But its reaction down touched 2722.25 before the open. Rallying through the open tested 2735.50, and retested it after quickly dipping 8 points and just as quickly recovering.

Probing under the 2733.50 earlier overnight low was recovered in time to be still be tested as the opening 15 minutes of volatility lapsed. It wasn’t rejected decisively, and not for lack of trying. Neither was it recovered decisively. But the few times this setup does appear it tends to be absorbed, and resolve as bullishly as it would have been bearish.

The next reaction fell 10 points to test and retest 2725.75. But that didn’t prevent another bounce from touching the 2732.50 bias-up signal in time to invoke the grace period. It triggered at 10:30, helpfully also probing the pre-10:15 high.

The 2740.50 bias-up target is already met, being probed by at least 1 point. It is resistance, but this is still a bias-up environment which can extend. This being Friday, the morning’s bias tends to persist through the noon hour. And this being expiration, morning setups tend to influence the session.

Chance to renew bias-up fails as target holds.

But it’s still a bias-up environment. That is, the 2703.00 bias-up signal was exceeded through 10:15. Simple. Let’s complicate that, shall we?

Triggering bias-up puts into play its target. Which this morning is 2713.50. Which was tested already post-open, first up to 2717.75, then lower and lower through 10:15 when it was officially pronounced as having held. So, this is a bias-up environment whose target is met.

It’s still a bias-up environment, so its target can be met again. Its target need not hold a retest, although that’s less likely having held its test(s) through 10:15 instead of exceeding it to renew the bias-up signal. The likelier resolution is to attack or test the bias-up signal as support.

That seems odd, and should — expecting the bias-up environment to dip. But it tends to be the resolution when not renewing the bias-up signal AND when gapping up so high as to have avoided even touching the bias-up signal during the session’s entire first 45 minutes.

So, that’s the expectation. Unless the 2713.50 bias-up target is exceeded, the balance of the bias environment is likely to attack or to test its 2703.00 bias-up signal as support. Anything later or lower will depend on what pattern forms along the way. I’ll lower the buy signal as possible.

ADDENDUM: Before being able to upload this post, the expectation described above (which I have been describing all morning in the chaRTroom) was fulfilled. More so, 2703.00 is being probed to test 2698.00-2700.00. This will require bouncing to at least 2703.00 for it to define the window’s lower-end. And there’s potential for today to close back under 2684.00 which would invalidate yesterday’s recovery. However, it’s too late to invert the bullish WedEX.

CPI reaction is retraced entirely.

The overnight fluctuation around this morning’s 2673.75 bias-up target had just begun improving into the pre-open CPI report. Oops.

Remember the oddities I mentioned this morning of yesterday’s treading range that barely measured double-digits, and the ranging through midnight that was single-digit in width? The knee-jerk reaction’s 49-point plunge probed 7 points under yesterday morning’s low.

The open was greeted at this morning’s 2645.50 bias-down target. Its 2655.50 bias-down signal was tested halfway through the opening 15 minutes of volatility. And the 2666.50 bias-up signal was being tested at 10:15. It triggered late, after having probed its 2673.75 bias-up target by 1 point. And now higher highs at 2676.75 are 3 ticks short of the overnight, pre-CPI high, pre-post-CPI knee-jerk reaction high.

Nothing requires extending or retracing. But a market that can plunge 49 points and rally 50 points within two hours is a market that can rally and plunge a lot. And the quick post-open surge to resistance I discussed before the open — albeit discussed in the context of probing fresh highs — is still a risk. Back under the bias-up signal when the bias-up environment is lapsing would be vulnerable to extending down sharply. Otherwise, entering the noon hour above 2673.75 would next target 2684.00.

Overnight pullback neither expending nor recovering.

The opening minute quickly touched the 2636.25 pre-open/overnight low, then bounced to the 2645.50 bias-down signal. This characterization of the open almost serves to define the rest of post-open price action. The 2637.50 bias-down target held repeated tests and attacks as support, while the 2645.50 bias-down signal also held repeated tests as resistance.

The picture didn’t get any clearer. Still testing the bias-down signal within 3 minutes of 10:15 invoked the grace period through 10:30, which was still overlapping the bias-down signal. This is a noN-bias environment. Not bias-down targeting a retest of its 2637.50, and not no-bias targeting tests of the bias-up parameters. The bias parameters are still influential as support and resistance, but there tests don’t require a specific resolution.

Meanwhile, the grace period did probe a fresh post-open high up to 2650.25. Yet, that was retraced in time to avoid recovering the 2645.50 bias-down signal. The setup would have been pretty bullish, putting into play offsetting tests of both bias-down parameters. Not exploiting the setup in-time to trigger tends to be as bearish as it could have been bullish. That started to develop with a reaction down to 2640.00, but now fresh highs are being probed up to 2652.75.

noN-bias is unpredictable, other than identifying its support and resistance. Exiting the bias environment at 11:30 above or below its 2645.50 bias-down signal could offer more reliability for the next leg. But what we do know at this stage is that weak-handed buyers are still stretching the rubber band, probably gaining no traction for their effort.

Overnight rally reacts down sharply from resistance.

The overnight rally up to 2655.00 had consolidated for several hours. Almost an hour before approaching the open, a 19-point plunge attacked this morning’s 2625.75 bias-up signal as support to within 1 point. Bouncing into and out of the open attacked 2655.00. Its reaction did worse than before the open, plunging almost 35 points to touch 2620.00.

The 2625.75 bias-up signal is still being overlapped, and not necessarily broken. Not yet. Being a bias-up environment, 2625.75 should define the window’s lower-end. Hovering here into  the bias environment lapsing would be more vulnerable to resolving down. This requirement to hold or to retest the bias-up signal doesn’t prevent breaking under it, by a lot.

Back above 2636.25 would start to signal momentum reversing up. There’s a lot to retrace before suggesting a bigger bounce may be underway. Meanwhile, it’s still likely that overnight highs completed the corrective bounce.