Post-open Review

Still fighting the drop.

Attacking Friday’s 2419.50 low overnight to within 1 tick was retraced to Sunday night’s 2418.25 sell signal. Stopping short of touching the low, and then retracing all of a downleg. Perhaps that optimism can be dismissed due to US markets not yet having opened.

But even that has found buyers stepping up, despite soon being taken out. The open was greeted unchanged from Friday’s 2424.50 cash session close. The opening 15 minutes of volatility fluctuated 2 points either way around it. That was just long enough to reflect optimism without also forming an anchor.

Resolving down probed a fresh low under 2416.00. The 2421.25 bias-down signal triggered, and its 2414.25 bias-down target is in-play. None of which has prevented a 4-1/2 point bounce up to 2420.50. More of the same ineffectual optimism that has been refueling the decline?

The open’s congestion could attract price back up for a retest before resuming the decline. Exiting the bias environment back above its 2421.25 bias-down signal could retest Friday morning’s 2439.50 high. But resuming the decline would next target 2411.75 and then potentially under 2400.00.

Consolidating under yesterday’s lows.

One final attack on the 2434.00 overnight high one hour before the open was enough. Fresh lows post-open were likely, so the selling resumed. Sliding into and out of the open greeted it at the 2426.25 bias-down signal, and extended down to 2419.50. The 2421.00 bias-down target was influential along the way,

A bounce attacked 2428.00 and almost rejected both bias-down parameters. The grace period was invoked, but not exploited. This is a lat4e bias-down environment.

Already having tested the 2421.00 bias-down target its retest isn’t required. By the same token, being a bias-down environment, the bias-down target need not support the range’s lower-end. I would still expect a break lower at any time to extend. The next lower objective is 2411.75.

Otherwise, hovering at, under or around the 2426.25 bias-down signal until the bias environment begins lapsing could still rally. It’s not likely, especially without the hovering. Also, this afternoon’s bearish WedEX suggests otherwise, too. But nothing on expiration Friday protects against counter-trend moves, no matter how temporary they may prove.

Post-open bounce snaps back down. A lot.

The pre-open test of 2459.00 was duplicated at the open. Its 5-point reaction up fulfilled the bounce to 2463.00 described in the Market Tour as being optimal before shorting. Potential for extending higher began deteriorating with every minute that didn’t leverage the bounce into a rally.

Potential for extending higher disappeared entirely as the 2461.50 bias-down signal failed to hold. Aided by a rumor (yesterday it was a headline) the drop extended down through the 2455.50 bias-down target in time to renew the signal. The renewed bias-down target at 2450.50 was soon tested down to 2449.75.

A corrective bounce has returned to 2450.50. Any lower low would essentially confirm this morning’s downleg remains intact, and intends to extend down considerably. Yes, this could be one of those days — relentless downtrending interrupted only briefly by substantial bounces.

Could this be a low, instead? The 2450.50 renewed bias-down target is essentially the halfway point back to last week’s lows. That’s not often durable. Back above 2457.50 would be more credible. And the gap back to Friday’s 2440.00 close wants to be filled, probably down to 2437.50. That doesn’t include last Thursday night’s lows that are likely to be tested, too, and broken on the way to 2425.24 and 2421.00.

Rejection and extension both ruled out.

Having retested the rally’s 2471.00-2473.50 objective Tuesday night, exceeding it all but requires probing above it overnight, too. Its lower-end was touched last night, so retesting it pre-open would have likely extended to greet the open much higher.

It wasn’t retested pre-open, so no morning surge. One of the two remaining scenarios could be ruled out, too, since the open wasn’t greeted in decline.

Which leaves the scenario likely in-play now, which is an intraday retest of 2471.00-2473.50. The 2468.50 bias-up signal just triggered late, targeting 2474.00. Back under 2467.50 would start to suggest the late bias signal is failing, and that testing only the lower-end of 2471.00-2473.50 will suffice.

Overnight rally fulfills target, attracts sellers.

Any influence of overnight price action on intraday must be obvious during the opening 15 minutes of volatility. So, meeting the 2471.00-2473.50 objective overnight and already retracing it left the open two divergent options.

The first option was to repeat the rally. The 2471.00-2473.50 objective is still resistance, but it can at least be retested intraday. The challenge was a pre-open bounce that already had retraced 61.8% back to the overnight high. That’s significant resistance. And it held.

The second option was to extend the overnight reversal down. More so, not to allow the opening 15 minutes to create any reversal setup, let alone to recover any relevant resistance.

The latter option developed, dipping back into yesterday afternoon’s range. And then deeper to its lower-end at 2462.50. Bounces have resolved down, putting into play an offsetting test of the 2459.00 bias-down signal, which has now been attacked to within 1 point.

By the way, testing 0the 2472.50 bias-up signal overnight doesn’t equate to testing it intraday. So, it wasn’t rejected intraday, and an offsetting test of the 2453.00 bias-down target is not required. But it’s still likely if 2459.00 is broken going into or coming out of the noon hour. Otherwise, we can’t yet rule out  a bigger recovery.