Post-open Review

Terribly choppy open ultimately rejects buyers.

For all of the fluctuation since Sunday night’s plunge and Globex action through the holiday, pre-open ranging narrowed in on Tuesday’s 2469.00 bias-down signal. The open essentially printed it, and then volatility expanded sharply again.

Surging to 2471.25 quickly reacted down to 2465.50. Recovering almost the entire reaction was itself been retraced almost entirely. The recovery had held above 2469.00 in time to trigger no-bias, and in time to avoid invoking the grace period. But dipping again back under 2469.00 through 10:30 invalidated that potential upside.

Now its 2464.00 bias-down target is being met, despite the dip having come too late to trigger bias-down or to invoke the grace period. This behavior matches that inhibition against rallying which I described during the Market Tour. Exiting the bias environment at 11:30 back above 2469.00 would be very bullish. But that faces an added degree of difficulty as fresh lows down to 2462.25 have taken both 1-minute and 3-minute RSIs simultaneously oversold.

News fulfills recent optimism, but no more.

Pre-open rallying had already fulfilled the next higher objective at 2477.00. The knee-jerk reaction to Payrolls tested this morning’s 2477.25 bias-up target. But not much more. And not for long.

Post-open action also tested 2477.25, and that test held, too. Reacting down came within 3 ticks of touching the 2472.25 bias-up signal. Never mind, its recovery was maintained through 10:15 to trigger bias-up.

So, this is a bias-up environment, whose target has been met already. Its retest isn’t required, although it’s being attacked now to within 2-3 ticks. And its resistance isn’t required to hold, although it often does.

Maintaining the gap up without also also extending higher through the open isn’t necessarily bullish. And less so when its reaction overlaps the prior session’s high. If still hovering at the highs through the morning, then watch the bias environment exit at 11:30 for indications of breaking  either way — which could trend well into the afternoon.

Open’s rally satisfies upside attractions.

The overnight rally to 2465.00 had corrected down to 2459.50 when the Euro tumbled. But firming greeted the open at a 2463.50-2464.25 buy signal that I had identified in the chaRTroom.

Its first test bobbled. Its second test surged. The 2466.25 bias-up target was tested through the opening 15 minutes of volatility. Its eventual reaction down to 2464.00 was reversed up sharply to test 2469.00 by a couple of ticks.

1-minute RSI had been diverging negatively, and 3-minute RSI left overbought territory again. And 2469.00 coincides with downtrending Pivotal Resistance off of July’s high. A reaction down finally developed, touching 2464.25.

Maintaining a break under 2464.25 would likely open the floodgates to selling. It’s the low of an inflection point’s test at 2465.50. And there is no “unfinished business above.” The overnight range would likely be probed down to 2457.50, for starters.

Avoiding a deeper pullback this morning would maintain upside potential to 2477.00. Potential, not necessarily momentum — not without also entering or exiting the noon hour above 2469.00.

Pre-open dip holds support.

Having probed yesterday’s high overnight, exiting the open under the 2445.25 overnight low would have reversed momentum down. It was probed pre-open and post-open down to 2442.75, with an interim test of 2445.25.

2445.25 was recovered again well before the opening 15 minutes of volatility had lapsed. And that has since extended up to 2449.25. The usual reward is at least to retest the 2454.25 overnight high.

Normally, this setup also would marginalize sellers through at least the morning. Today is suspicious, for a couple of reasons — lacking velocity at the inflection points, and 1-minute RSI repeatedly avoiding overbought territory.

No consequence is required, but often another downdraft develops anyway. If a downdraft does develop, it would likely be absorbed, and recovered, attracted to a retest of the overnight high.

Post-open bounce.

Tuesday’s open was indicated at the 2427.25-2429.00 objective which needed to hold through 9:45 to begin signaling the overnight drop had ended. Back above 2430.75 would be optimal. Otherwise, breaking lower quickly would signal that the intraday crowd wanted to express its own knee-jerk reaction to yesterday’s post-close headline.

Up could recover the 2433.50 bias-down target and more, perhaps also fill the gap back up to yesterday’s 2443.00 close. Extending the drop would target 2411.75, if not also sub-2400.00.

The opening minute resolved up, as did the first 15 minutes and the first half-hour. Bias-down wasn’t renewed, but this is still a bias-down environment with its upside limited to its 2439.00 bias-down signal. That’s just another 6 ticks higher. But it’s still a bias-down environment.

Back under 2433.50 would be likely to retest the open, and the open’s retest would be unlikely to hold. The 2411.75 and sub-2400.00 objectives would be in-play.