Post-open Review

Overnight rally extends uninterrupted.

When relentless, one-way overnight trending is reversed intraday, it tends to be reversed almost immediately at the open. Therefore, not immediately reversing down through the open would be bullish. And it was likely to test room for noise up to 2457.50, if not also extend to test 2463.00 and potentially 2471.00-2473.50.

Which the open did. Mostly, so far.

Hovering just under the 2455.50 overnight high surged to fresh highs through the open. The bullish strategy was to get long immediately and to monitor for a reversal setup at 2457.50. None developed. Indeed, 1-minute RSI diverging negatively was bullish in context of persistently overbought 3-minute RSI. Resistance at 2463.00 was attacked before 3-minute RSI left overbought.

Now 2463.00 is being probed by 3 points. That doesn’t ensure fulfilling potential to 2471.00-2473.50. We’ll let pullback limits guide that, and the nearest now is 2464.75. Regardless, Thursday’s trend change signal does have an interest in today’s close being back under 2459.00.

Testing bias-up, without triggering or rejecting it.

The overnight dip had touched this morning’s 2430.75 bias-down target. Twice. The retest’s reaction greeted the 8:30 econ report at the 2436.25 bias-down signal. The news triggered a surge.

That was within 1-2 hours of the open, suggesting its sponsorship is weak-handed. In fact, reacting down through the open touched the 2436.25 bias-down signal.

2436.25 reacted up to fresh highs at 2445.50. The 2443.25 bias-up signal was being overlapped at 10:15 to invoke the grace period. And it was being overlapped at 10:30 to avoid triggering or being rejected.

This is a noN-bias environment. Not a bias-up targeting 2450.50. And not a no-bias targeting an offsetting test of the already tested 2436.25 bias-down signal. It’s not usual, but it’s not abnormal. This morning’s bias environment need not be defined by its bias signals.

A fresh high would be likely to also test 2450.50. If sellers retake control this morning or coming out of this morning’s bias environment, then the balance of the session could trend down to new lows.

Overnight drop finds reinforcements.

Initially bouncing 3 points from a test of this morning’s 2461.50, which is this morning’s bias-down target, the overnight drop never recovered. The opening print was essentially 2461.50, and it quickly attacked prior lows. Another quick bounce was absorbed and reversed down quickly to fulfill the bearish scenario of sellers taking immediately control.

And the results were dramatic. The opening 15 minutes of volatility ended at what would have been the 2455.75 renewed bias-down target. Its reaction up to 2460.00 really let go with a plunge to 2449.00.

Although that last plunge is now bouncing back up to 2455.75, the mold is already set. The initial bounce from 2455.75 could have ended the drop — 9:45 was the low print, RSIs diverged positively on its retest, and its bounce limit was violated. But not only were the conditions not exploited, an attempt failed. There is no second bite at that apple this morning, and all bounces to whatever degree should also fail.

Back under 2453.75 would start to signal the decline resuming. And the decline should resume regardless, so long as 2458.25 isn’t recovered.

But how big of an interim bounce?

The choppy 2460.00-2465.00 pre-open range tried breaking higher at the open. That only stretched the rubber band to snap back down, from 2466.50 to 2459.50 during the opening 15 minutes. But only temporarily, as another bounce soon attacked 2468.00.

Ultimately, bias-down did trigger. The 2469.25 bias-down signal wasn’t even attacked until minutes ago, to within 1 tick. And that was the third  recovery effort, following two that failed during their timing window, so dooming this one to failure.

Back under 2465.50 would start to signal this third recovery effort was already reversing down. The likely consequence is to launch a new downleg — not just to retest the 2458.50 area down to 2455.75, but to break it on the way down to 2445.75.

Meanwhile, a bigger bounce could yet fill the gap back to yesterday’s 2472.00-2473.00 close. Extending higher into an actual recovery isn’t likely. So, extending higher into an actual recovery would be that much more powerful.

Extra dip is recovered.

Holding 2475.75 through the opening 15 minutes of volatility — preferably piercing only 3 ticks lower — was the optimal setup for rallying this morning. But opening at 2475.00 dipped to 2472.50, touching an inflection point there that would have opened the door to sharply lower levels.

The two paths seem very different. Except that the open’s deeper dip did recover back up to 2475.75 as the bias timing window approached.

The 2478.75 bias-up signal didn’t trigger. But its test has been put into play by holding a test of the 2472.75 bias-down signal. This morning’s most bullish scenario may be to work its way back up to yesterday’s high, positioned to rally higher when the bias environment’s constraint lapses.

Already, the reaction up is attacking 2478.00. Backing-and-filling is still possible while waiting for the bias environment to lapse. Rallying this afternoon could be very productive, targeting at least 2484.00. Otherwise, holding a test of the bias-up signal and reversing back under the opening print could trigger a new downleg.