Post-open Review

Initial surge hardly defines the open.

This week’s pattern of multiple personalities has continued through today’s open. The recovery to 2806.00 had reacted down 10 points before the open, and still had time to gap up at 2806.00.

Then extending 2 points higher reacted down 8 points to attack 2800.00, and avoided triggering the 2805.00 bias-up signal. Attacking it to within 2 ticks wasn’t close enough to invoke the grace period, but probing it through the bottom of the hour has invalidated the no-bias.

It’s too late to trigger bias-up, so its target isn’t in-play. It’s not a no-bias, which would have put into play an offsetting test of bias-down signal. Probing higher is possible — in line with the template we’ve been discussing, which would include vulnerability to reversing down.

Probe of overnight lows recovers, at least.

One more bounce back up to this morning’s 2807.50 bias-up signal had held and returned to the overnight lows’ test and retest under 2801.00. Disappointment was obvious in the market’s deign not to greet the open gapping up. The retail crowd needed to express that same opinion, so a probe under overnight lows became likely.

But the open’s blip-down barely touched the 2799.75 overnight low before reacting up. Reacting up into positive territory at 2806.50 wasn’t likely to extend, as a probe under overnight lows remained likely.

Finally, the open’s choppy range broke lower. The 2798.25 bias-down signal was only attacked to within 1 tick to avoid invoking the grace period. Probing under it down to 2795.75 was recovered back to 2798.25 in time to avoid invalidating no-bias. A lower low would still be “no-bias trending” that requires recovery, but probably not before testing 2792.00-2793.00.

This is a no-bias environment. An offsetting test of the bias-up signal is not required, since the bias-down signal wasn’t touched during the bias timing window. Backing-and-filling down to 2798.25 is possible, perhaps even a little likely, but not necessary before launching a probe into positive territory this morning or this afternoon.

Buy the dip, but sell its bounce.

Rallying overnight eventually extended 12-16 points from yesterday’s 2777.75 and 2782.50 closes to test 2794.00. Already reacting down greeted the open at 2789.00. It was still a gap up, but it wasn’t maintained. Instead, the open slid to within 1 tick of yesterdays’ 2782.50 futures close. That was soon probed down to 2780.50.

So, no-bias, right? Actually, a bounce probed the 2787.50 bias-up signal by 1 point in time to invoke the grace period. Actually, the extra time wasn’t exploited, and its reaction fell to 2784.00.

So, no-bias, right? Actually, another bounce probed the 2787.50 bias-up signal by 1 point. It’s still holding, again. So, no-bias.

Which puts into play an offsetting test of the 2772.50 bias-down signal. Which would be in the orbit of yesterday’s 2769.50 low that requires a retest for being accompanied by oversold RSIs. No-bias trending is still possible, especially when bias triggers late. Regardless, not exploiting and extending the gap up does suggest that even the most bullish scenario needs at least some more backing-and-filling below.

Opening surge extends overnight rally.

The overnight rally’s 2803.50 high had pulled back to within 1 tick of this morning’s 2798.25 bias-up target. That was retraced more than 61.8% before the open, then recovered entirely through the open. And not by a little.

2808.50 was touched during the first half hour. The 2898.25 bias-up target and its 2804.50 renewed bias-up target were exceeded through 10:15, triggering a doubly-renewed bias-up signal. Which really means that trending is extended. And not by a little.

Trending can always extend further, but this didn’t. A reaction probed three pullback limits down to 2804.00. A likely corrective bounce to 2806.75 was touched before resuming the reaction. And not by a little.

The drop touched overnight “lower prior highs” at 2785.25 that I discussed during the Market Tour. As noted, not already testing them during the open made them likelier to hold — if not this test, then their retest. But there’s room anyway down to the 2792.25 bias-up signal during the bias-up environment.

Now bouncing 5 points is now testing 2800.00. Oversold RSIs at the pullback low require its eventual retest. This is still a bias-up environment, and nothing prevents resuming the rally. But overbought RSIs thatdeveloped during the open don’t require a retest.

Pre-open plop produces opening pop.

The overnight rally had run into resistance at this morning’s 2776.25 bias-up target. Ranging there broke lower in reaction to the CPI report, plunging back to the earlier 2766.25 overnight low. Its reaction up still tested the 2770.00 bias-up signal at the open. Which held, launching a rally back above the overnight highs to 2778.75.

Complexity while forming the overnight high made it a “new Globex trend extreme” requiring intraday retest. That’s often the same day, but not always. Today’s is already resolved. And exceeding the bias-up target through 10:15 has renewed the bias-up signal. Although not a requirement, the next higher targets are 2781.50 and 2787.00.

Back under 2775.00 would start to signal at least a pullback underway. And maybe only a pullback. A trend reversal would be possible, but less likely. It would be well-rewarded, too, eventually targeting 2730.75. But this being a Friday, the morning’s bias signal tends to persist through the noon hour.