Post-open Review

Open’s dip ends on time, but bullish WedEX quite delayed.

The bullish WedEX influence remains intact so long as selling is essentially contained to the opening 15 minutes of volatility. The opening 15 minutes of volatility contained nothing but selling.

Dropping nearly 5 points from 2469.50 narrowly avoided touching the 2464.50 bias-down signal. It’s being touched now, but not in time for it to require an offsetting test of the 2472.00 bias-up signal. The 2464.50 bias-down signal also narrowly avoided being broken at 10:30 to invalidate the 10:15 signal.

Breaking 2464.50 this morning would be no-bias trending that requires a recovery, but it the bullish WedEX would be invalidated all the same. Meanwhile, this is the range’s lower-end. Recovering to 2472.00 isn’t required, but there’s that much room And at least 2469.50 should be recovered to comply with the bullish WedEX.

Big level met and held through the open.

Rejecting the brief overnight rally had initially attacked this morning’s 2469.00 bias-down signal. Another break lower greeted the open at yesterday morning’s 2465.50 low. Consolidating there eventually broke lower to fulfill “unfinished business below” at 2463.50.

RSIs diverged positively on a retest of 2463.50 down to 2462.75. Reacting up through 10:15 avoided renewing the bias-down signal. But this is still a no-bias environment. Fresh lows can’t be dismissed, although they’re less likely. Recovering further this morning should be defined by the 2469.00 bias-down signal if it is tested.

2469.00 can be recovered without consequence when the morning bias environment begins lapsing. The afternoon’s bullish WedEX influence begins at the afternoon bias environment begins. So long as this morning’s lows aren’t broken, no other unfinished business below is currently preventing an afternoon uptrend.

Gap up retraced.

Unchanged is natural support. Yesterday’s unchanged is its 2471.00 cash session close. And a 4-1/2 point slide probed it by 1 point in time to snatch a clean bias-up signal above 2472.50. The slide developed in time to invoke the grace period, now putting into play an offsetting test of the 2463.50 bias-down signal.

Presumably, the drop was triggered by news of the Russia investigation/witch hunt expanding to President Trump’s business dealings. Extrapolating from an interview released last night in which Trump said this would be going too far, Special Counsel Mueller would be fired shortly. The market is obviously concerned with the extra depths of uncertainty that would/will bring.

Immediate fallout has extended down to 2465.50. That’s essentially yesterday morning’s “lower prior highs.” Its test is reacting up 7 points while still being the first reaction up from the previous trend’s extreme. Oversold RSIs require an eventual retest, which this morning would likely reach 2463.50. Otherwise, recovering 2469.75-2470.25 would start to signal the news was absorbed already — that’s being probed now by more than 2 points, and wasn’t yet touched when I began writing this sentence.

As for the gap up, it did not extend higher, so it is not an anchor that preserves the uptrend. It was maintained through the open, so its 2474.00 opening print does require an eventual intraday retest, however that may resolve. And the 2476.25 overnight high is  a “new Globex trend extreme” that requires eventual retest intraday, too.

Pre-open surge reaches highest target… BONUS VIDEO!

The narrow and largely undefined overnight range broke higher one hour before the open. Touching obligatory resistance at Friday’s 2461.25 high reacted back down to the overnight range’s downtrending resistance.

The trendline had become support, and its test launched a recovery to fresh highs confirming its breakout. Just recovering 61.8% of the breakout suggested already the pattern would extend higher. In fact, the open was greeted at or above Friday’s high and extended sharply from there.

This morning’s 2465.75 bias-up target had become the likely objective for any fresh high. An interesting RSI setup along the way essentially confirmed the target was in-play. [WATCH THE VIDEO(S) BELOW FOR A QUICK 4-6 MINUTE LESSON.] Its reaction down failed to renew the bias-up signal, but this is a bias-up environment.

Despite being a bias-up environment, extending higher this morning isn’t assured. The high’s overbought RSIs don’t require being retested since they developed during the open, but it’s still likely. Extending higher at all would next target 2469.50. Breaking under the 2459.75 bias-up signal when the bias environment is lapsing would trigger a deep intraday pullback underway. This is NOT the likeliest scenario, unless it were to resolve back in positive territory.

LESSON: 1-minute RSI diverging against a persistent 3-minute RSI.

Several minutes later…

Pre-open fails to attract sponsorship.

I discussed a pullback during the Market Tour that needed to hold 2456.50 to maintain the potential for breaking back to Friday’s high. It broke. The open was greeted at 2451.50 and slid immediately to 2450.00.

2450.00 is Friday morning’s “lower prior highs” that could have ended the pullback if tested yesterday morning, or Sunday night. That’s no longer likely. Possible, but not likely. In fact, it’s trying. Reacting up from 2450.00 attacked 2455.00. More important, it avoided triggering the 2453.25 bias-down signal.

So, this is a no-bias environment. Having held a test of the 2453.25 bias-down signal, an offsetting test of the 2459.75 bias-up signal is in-play.

Caveat: 2453.25 is still being tested at 10:30. That’s not at all reassuring. An inflection point above it at 2454.25 has been pierced, but by fewer than 3 ticks. So, back under 2452.00 would still be credible for probing lower. And probably also for fulfilling the 2448.25 bias-down target before recovering. Exiting this morning’s bias environment any lower than that would invalidate 2459.75‘s attraction above.