Post-open Review

Attacking new highs.

After spending all of yesterday in negative territory, gapping up above relevant levels would be the only immediate path higher today. The least of those relevant levels was this morning’s 2752.00 bias-up signal. It was only attacked to within 3 ticks from 2756.50 above by a dip into and out of the open.

Maintaining the open’s gap kept alive upside momentum. The dip was recovered by almost a 7-point rally to fresh highs at 2759.50. The 2757.50 bias-up target was fulfilled along the way.

Touching the bias-up target during the open added a new dynamic, or adapted an old one. Its recovery through 10:15 became as important as was maintaining the gap up above the bias-up signal. Where the first setup succeeded, the second one failed. It’s still a bias-up environment, but whose bias-up target was no longer being exceeded at 10:15.

Near-term resistance at 2759.25 reacted down to violate its pullback limit, extending at least 6 points to 2753.25. But now near-term support at 2753.75 has just held a test, as did 2759.25 above. The pullback may have ended.

Since the initial rally stopped 2 ticks pessimistically short of touching Tuesday’s high, probing it is likely — and likely to be measured in points, not ticks, such as 2765.25. Meanwhile, still being a bias-up environment, a test of the 2752.00 bias-up signal should define the window’s lower-end. It can be broken after the bias environment begins lapsing without requiring a recovery.

Renewed bias-down trying not to extend.

The overnight drop to 2737.25 had bounced to greet the open at this morning’s 2745.00 bias-down target. The bounce’s measurements suggested that post-open follow-through would test 2746.75 before resuming the overnight decline. Its touch reacted down immediately back under 2745.00.

The minimum objective was to probe the overnight low. And it was, quickly, pierced by 3 ticks down to 2736.50. But that was all.

Immediately reacting up has extended to recover the 2739.75 renewed bias-down target. The 2745.00 bias-down target was still being tested at 10:15 to avoid renewing the bias-down signal. Another point has been added to 2746.00.

Back under 2741.50 would signal the decline has resumed, if not signaled earlier. Currently, the only path higher must enter the noon hour back above 2750.00, and then maintain 2748.00 as support. Afternoon bias parameters will also be relevant.

Gap up’s retracement launches another upleg.

A dip back to “lower prior highs” around 2748.00 wasn’t required, but it was likely after probing higher. Probing higher wasn’t required, but it was likely after repeatedly returning to 2748.00 since the weekend.

But first, price had to get above 2748.00. Whether by gapping up or by surging post-open, a dip down to “lower prior highs” around 2748.00 was likely. The eventual path there began by breaking higher to 2752.25 before the open. Gapping up to 2751.00 surged again to 2753.50.  Soon after the opening 15 minutes of volatility had lapsed, a 5-point collapse touched 2748.00.

That test held, as did its retest while 1-minute RSI diverged positively. A bounce triggered the 2749.75 bias-up signal cleanly. And the 2753.50 high was just pierced. The 2757.50 bias-up target is in-play, although another downdraft could develop back under 2751.00.

Not shown on the nearby chart is a reaction down that tested the 2749.75 bias-up signal by 1 point. But the signal held as support when the pullback limit’s first 3 minutes had elapsed. Back above 2751.75 would start to signal the reaction down is done. Otherwise, a fresh low could trigger that next downdraft.

Pre-open dip setting the day’s tone.

The overnight slide eventually fell to 2736.50, but the open was greeted back above 2739.00. Rejecting 2739.00 through the open could have marginalized buyers and pointed down. But the open fluctuated around 2739.00, widely, and without resolving in either direction.

Recovering 2742.50 could have marginalized sellers and pointed back up. But the open’s fluctuation developed entirely below 2742.50 so sellers aren’t marginalized either.

Not recovering 2742.50 does make the morning likelier to remain under pressure, or to absorb bounces, regardless of whether price also trends down. Back above 2742.50 would start to signal that sellers are done, but still not have any upside requirement.

Post-news lower than pre-news.

The 2733.00 bias-up target was touched moments before the Employment Situation report was released. Its knee-jerk reaction down to 2729.75 was reversed up as quickly to a fresh high and higher to 2734.75. Neither extreme extended, as as slide back between them greeted the open at 2732.25.

The 2733.00 bias-up target was touched again, which now also represented a 61.8% retracement back up to the pre-open high. Both being resistance, price collapsed to 2726.50. Its recovery touched the 2732.25 opening print, also resistance, triggering another reaction down.

The 2727.75 signal was attacked to within 3 ticks. But it had become too late to avoid triggering bias-up. This is a bias-up environment whose bias-up target has been met. Already having met the target, and having yet to probe the pre-10:15 high, another downdraft is possible. Anything under the bias-up signal would be similar to no-bias trending, and required to recover.

But it’s still possible — not so much to test the bias-up target that the open already touched, but also for an intraday test of the overnight “new Globex trend extreme.” A retest of the overnight high may be required, but could be delayed indefinitely. So, a break lower may not collapse, but its recovery wouldn’t be assured.