Post-open Review

Gap up fails to extend, falls.

Gapping up to and/or through 2445.00, then extending through 2446.50, would have been reliable for extending higher this morning. The 2447.25 bias-up signal’s 2453.50 target could be tested while holding a retest of Friday morning’s high.

But the overnight recovery from 2436.25 got too optimistic. Gapping up to 2448.25 and blipping-up 1 point was reversed back down immediately. The opening 15 minutes of volatility lapsed at or under 2446.50, instead of extending its recovery.

There was still potential for holding 2445.00, but gave way to Friday’s 2443.00 cash session close. Now that has extended down to 2440.50, after triggering no-bias.

An offsetting test of the 2439.75 bias-down signal is in-play. And it’s going to be difficult for the pullback to above extending down to 2427.25-2429.00. Back above 2445.00 could start to signal momentum reversing back up.

Gap up maintained, extended too late.

The pre-open extension up to 2449.00 had reacted down 3 points to open at 2446.50. The first 15 minutes of volatility ranged there narrowly, only maintaining the gap up but not extending it higher.

Soon it was learned that Yellen isn’t discussing monetary policy. Extending higher — perhaps in relief — had become too late to reflect new sponsorship. Filling the gap back up to Tuesday’s 2451.50 close has extended to attack Tuesday’s 2453.75 high.

The renewed bias-up signal has essentially fulfilled its renewed bias-up target. It’s still a bias-up environment which can extend higher to 2457.50. But not extending during the open has made Tuesday’s high likelier to hold as resistance.

So, Yellen isn’t discussing monetary policy. But the ECB’s Draghi speaks this afternoon, and there’s no history of self-restraint on the topic. Could that renew the anxiousness that prevented rallying over the past two sessions?

Outage at our site’s host has delayed this 10:35 post.

Well, that was near-perfect. Pre-open action had extended to touch yesterday’s 2448.50 high, which was probed post-open by a couple of ticks. The rally required maintaining the prior high’s break, along with 2446.50. Otherwise, the overnight test of 2438.00 would require an intraday test, too.

Back under 2445.00 made it official. The drop quickly extended to probe under this morning’s 2440.00 bias-down signal to 2437.00.

RSIs made higher lows, and 2440.00 was touched in time to invoke the grace period. It was recovered in time to trigger late no-bias. An offsetting test of the 2448.50 bias-up signal is in-play, already attacked up to 2446.50. It could  be probed up to 2451.50, or another 10 points higher.

Having tested the bias-up signal at the open, it won’t become “unfinished business above” if left outstanding. Back under 2443.00 and 2440.00 would re-open the door to testing the 2435.25 overnight low, and would be vulnerable to extending down to Monday’s 2429.00 “lower prior highs.”

Maximum selling greeted the open.

The overnight tests of this morning’s 2446.00 bias-down signal had given way to also test the 2440.75 bias-down target. The opening bar blipped down to 2438.75. And held.

Sellers were already suspicious. The late extension wasn’t any more reliable. Its likely resolution was to test 2446.00 as resistance. Which it did.

Reacting back down to 2441.00 helped to maintain the bias-down signal at 10:15. Another bounce also reacted down before 10:30 to avoid invalidating the 10:15 signal. This is a bias-down environment. Its target has been met, but its signal should define the window’s upper-end.

None of which is preventing yet another test of 2446.00 as resistance. This strength is almost a half-hour premature for reliably breaking higher. A recovery would be more credible upon coming within 10-15 minutes of the bias environment lapsing.

Of course, premature buying runs the risk of being weak-handed sponsorship. Not exiting the bias environment in rally mode would open the door wider to fresh lows at 2438.00. Otherwise, restrained optimism that hovers at or around 2446.00 could still fill the gap back up to yesterday’s 2451.25 close today.

Open’s surge fulfills buying pressure.

When yesterday’s open had fluctuated entirely around Friday’s 2424.50 close, we knew that a probe of fresh lows might be short-lived. In fact, diving to 2415.75 was retraced entirely. We also knew that retracing a probe of fresh lows could extend back up to Friday morning’s 2439.50 high.

Which it just did. And then some.

This morning’s Market Tour had also discussed the overnight rally to 2437.50 and its pullback to the 2430.00 bias-up signal. It was likely to extend this morning — and probably not wait for the open. It did recover up to 2436.00 and the 2433.00 open surged to the 2441.50 renewed bias-up target.

All before triggering bias-up.

Now room for noise at 2443.00 has been tested. RSIs diverged negatively. Back under 2440.25 would start to signal at least a corrective dip to 2435.75, or something more substantial since the bias-up environment and its protection will have lapsed. But there’s still an ongoing series of higher highs and higher lows. and the rally is otherwise next targeting 2446.00.