Post-open Review

Pre-open rally extends through the open.

The overnight rally to 2716.00 had dipped 3 points to probe back under yesterday’s highs. That was its last similarity to yesterday’s pattern until the open’s surge. In the interim, dipping back to yesterday’s highs not only held, but also launched another upleg.

Greeting the open attacking 2720.00 reacted only momentarily before extending the rally to test its 2722.00 objective. Another 3-point reaction down confirmed the level’s relevance. But it was soon recovered on the way to attacking the 2727.00 target. The attack was slow-played, but extended momentarily to 2729.00.

1-minute RSI is refusing to become overbought again, and 3-minute RSI is now leaving overbought territory. Back under 2725.00 would start to signal the rally was being reversed. But back under 2722.00 through a relevant window would signal momentum reversing down.

Rally resumes relentlessly.

The pre-open retest of Friday’s 2698.25 pre-open high had reacted down to touch yesterday’s 2696.00 high as support. The open wasn’t greeted much higher, but it was certainly more aggressive. A steeper slope probed substantially higher through every timing window.

The open exceeded 2699.00 to make the bias-up likelier to trigger. The 2703.00 bias-up target was exceeded through 10:15 to renew the bias-up. And now the first hour is extending to 2708.50. All while 3-minute RSI remains persistently overbought.

It’s important to repeat that prior highs didn’t require a retest, let alone a break higher. Also, the interim dip was shallow, and not accumulative. This is new sponsorship, and vulnerable to becoming depleted if reinforcements don’t arrive.

Every timing window exited above 2703.00 and above any higher of its prior test makes the rally’s next higher objectives likely to be met at 2722.00-2727.00. Only closing under 2703.00 today can undermine that likelihood.

More than Friday’s late dip is being retraced.

Friday’s Market Wrap had noted that the path up would begin by gapping back up above 2674.25. Essentially, the 5-7 point probe under it after the cash session close must be proved to have been an anomaly. In fact, Monday night’s open gapped up to 2674.50.

The path higher had other demands, like triggering bias-up, if not also renewing it. In fact, overnight action eventually extended to probe this morning’s 2687.50 bias-up target by 3 ticks. Despite the open reacting down immediately to 2681.75, the 10:15 bias timing window was probing fresh session highs at 2690.00. Bias-up renewed.

The 2692.75 renewed bias-up target was just attacked to within 3 ticks. RSIs diverged negatively on its retest and reacted down immediately to 2687.50. The drop originated from a close-quarters Double Top, and its 2691.00 pullback limit hasn’t been probed deeper than its first 3 minutes, so the dip may be temporary.

Regardless, the renewed bias-up target is essentially a retest of Friday’s 2698.25 high, probably up to 2699.75-2700.75 and 2703.00. Otherwise, back under 2686.25 would start to signal the corrective bounce was done.

Post-open pattern persists in poo-pooing pre-open pop-up.

Rallying 12-points overnight to 2698.00 had reacted down pre-open to 2693.50. There was still room to buy back above 2696.50 for a bounce to 2699.75-2700.75 and 2703.00. But the open collapsed. And breaking under 2692.25 signaled momentum reversing down.

Probing the 2696.25 prior high was singular and not complex, so no “new Globex trend extreme” was created that otherwise would have required intraday retest. And no “unfinished business above” was left outstanding. Also, the recent pullback was too shallow to be accumulation which could have refueled buyers.

First Trade and Market Tour both warned about all of those. But the most important point was the current pattern of rejecting overnight rallies. Last night’s rally was larger and more productive, but it was still vulnerable to reversing down. Which it has done.

Both the 2688.00 and 2692.50 bias-up parameters have been rejected by triggering no-bias. Offsetting tests of both the 2681.50 and 2675.50 bias-down parameters are in-play.

Last Wednesday did the same, except for triggering late bias-down, not clean. And its bias-down signal’s test was fulfilled already during the first hour. That has been outstanding since. Today’s is the same 2675.50, and it may also be left outstanding if the past week’s “lower prior highs” aren’t broken. But it’s still likely, so long as 2692.50 isn’t recovered.

Immediate drop from bias-up signal’s resistance.

Pre-open hovering at or around this morning’s 2688.25 bias-up signal greeted the open with a blip-up to 2689.00. Its immediate reaction down fell to 2686.00, and then lower to 2683.50.

The likelihood for resolving down had suggested an initial short, with a stop (or stop-and-reverse to long) above 2689.50. Breaking under 2686.00 signaled momentum reversing down. And now no-bias has triggered. Holding a test of the bias-up signal has put into play an offsetting test of the 2681.50 bias-down signal.

If tested during the bias environment, then 2681.50 should define the window’s lower-end. That doesn’t preclude it from being probed, perhaps down to the 2679.00 or 2675.50 unfinished business below. Back above 2686.75 would start to signal momentum reversing back up.

CORRECTION: I’ve been referring to an early close for tomorrow, based on SIFMA’s recommendation. But the exchanges are open through regular trading hours. Then, similar to the Christmas weekend break, Globex does not re-open until Monday at 6:00 PM ET.

Meanwhile, we had an interesting review of several Cryptocurrencies. Bitcoin, of course, and Etherium. But also Litecoin, Ripple and Iota. I will be updating the blog before Tuesday to discuss any relevant price action among them.