Post-open Review

Open surges to its target.

The Globex open’s 2523.50 surge had reacted down overnight to 2517.50. Bouncing to 2521.25 retraced 61.8% of the reaction down. That’s natural resistance, and it produced another reaction down.

That second reaction down didn’t accomplish anything new. It greeted the open back at the 2517.50 overnight low. Meanwhile, 1-minute and 3-minute RSIs diverged positively. Post-open action reversed up immediately, and extended higher.

Soon after triggering the bias-up 2519.50 signal, the 2526.00 bias-up target was attacked to within 1 tick. That’s close enough to fulfill the target, so it won’t become “unfinished business above” if left outstanding. Overbought RSIs at its high suggest it will be tested, anyway.

For now, a 2523.00 sell signal is being probed. It’s the “first reaction down from the previous trend’s extreme,” which is very unreliable for reversing the trend down. But even just a corrective dip would likely target 2519.25. More so if overbought RSIs were neutralized first by retesting 2526.00.

Regardless of the open’s surge, there’s no assurance of extending higher today. Already having fulfilled the target, sellers aren’t marginalized and there’s a vulnerability to reversing down. But reversing down in this pattern will be difficult if not already underway into or out of the noon hour.

Post-open dip is recovered, for now.

As was suspected, the narrow overnight range wouldn’t bear any resemblance to this morning’s action. Which explains the second minute launching 4-minute 3-point surge to 2509.25.

It also explains the 4-1/2 point reaction down to 2504.75. Actually, not even a 3-point drop, once it finally got underway. (The open’s surge had quickly settled into a consolidation.)

It also explains the reaction’s recovery, back up to 2509.25. So far.

So far, because we’ve also suspected this morning would probe new highs. Gapping up would have ensured it, and also made the probe durable. Not gapping up could still produce new highs, and become very vulnerable to reversing back down.

The post-open reaction down could be a glimpse of that reversal down. Reversing is always difficult on Fridays. Reversing down is more difficult — not only from an intraday high, but from a multi-session high.

The past two Fridays threatened to collapse, and recovered instead. The same is entirely possible today. But look out below if not, if unusually slower afternoon volume prevents absorbing another dip back into the range, and the post-open dip was only a warning shot across the bow.

Opening chop finally resolving up.

The relatively narrow overnight range finally tried trending, only minutes after I had mailed out this morning’s Market Tour. The break was down, but it was otherwise operating under the same principle as Tuesday’s late break higher — that  its sponsorship was weak-handed and unlikely to extend.

The late break down touched 2499.00, fulfilling its potential for a retest. That didn’t change what we already knew, that rallying immediately would be credible for extending. So the open blipped-up to 2503.50.

And held there.

Buyers still got a benefit of the doubt, but sellers kept chipping away at it. Not until minutes after triggering no-bias did a more productive recovery effort begin. And it has extended to attack 2506.00.

There’s room to test the 2508.75 bias-up signal as resistance. But no requirement to even touch it. And exiting the bias environment back under 2501.00 would start to signal a more serious intraday decline was underway.

Opening rally is reversed.

The third time’s a charm, when you’re monitoring for it. That’s the case with this morning’s third consecutive rejection of initial optimism. It’s already responsible for a 9-point slide.

The overnight rally from 2495.50 had reacted down from touching yesterday’s 2501.25 pre-open. Resuming the rally greeted the open at 2503.50, instantly fulfilling the prior two sessions’ “unfinished business above.” Extending higher to 2505.00 also tested this morning’s 2504.00 bias-up target.

But the bias-up target had yet to be triggered. Which it wasn’t. Reacting down overlapped the 2499.50 bias-up signal at both 10:15 and 10:30 to trigger noN-bias. And like the two prior sessions, price action within the next 3 minutes was breaking under the bias signal that had otherwise held through 10:30.

The reversal has touched 2496.00. Attacking yesterday’s close to within 2-3 ticks is now reacting up. Nothing requires actually filling the gap, but oversold RSIs at 2496.00 undermine the reaction’s sponsorship.

Recall that Monday and Tuesday’s rejected optimism each had left outstanding “unfinished business above.” Not today. Even if bias-up had triggered, its target was already met. And the unfinished business above was already neutralized. Recovering like the prior two sessions is much less assured.

Late break higher holds up through the open.

The overnight narrowing sideways range centered around 2495.50. Breaking higher greeted the open at 2499.00, where a brief reaction down to 2497.25 was recovered into a 2499.00-2501.00 range.

For 45 minutes.

The 2498.00 bias-up signal has triggered. It would be invalidated back under 2498.00 through 10:30. Otherwise, its 2503.50 bias-up target would also fulfill yesterday’s 2503.00 “unfinished business above.” It is equally vulnerable to a knee-jerk reaction to headlines of any escalation in the N. Korea spat.

Meanwhile, Fed Chair Yellen is scheduled to speak just before noon. Just before the morning’s bias environment finishes lapsing. Greeting the event from above 2503.50 would help to absorb any pessimistic knee-jerk reaction to her comments.

In either case, the pre-open rally started too late to avoid its complete retracement. And yesterday’s base already had closed too low for a rally effort to gain traction.