Post-open Review

Little or no interest in rallying.

Global markets weren’t eager to pick up Friday afternoon’s ES rally to new highs. And ES hasn’t been encouraged by its own rally effort. The opening 15 minutes of volatility fluctuated choppily at or under 2456.50 unchanged.

A nearly 4-point surge from attacking the 2454.00 overnight low has gradually improved to touch this morning’s 2459.00 bias-up signal. But it’s too late to trigger, and even too late to invoke the grace period. This is a “no-bias” environment.

Exceeding 2459.00 through 10:30 would have invalidated the 10:15 no-bias signal. Instead, Exceeding 2459.00 now would be “no-bias trending” that is doomed to failure. And having stopped several times pessimistically short of 2459.00 does start to be pessimism, which is potentially bullish from a contrarian standpoint. The limp sponsorship is winning that battle.

Perhaps that’s why the pessimism isn’t being exploited. Meanwhile, not having touched 2459.00 by 10:15 doesn’t have the offsetting requirement of testing the 2453.50 bias-down signal. But there’s room down to it as noise within the range during this morning’s window.

Probing fresh highs.

The overnight dip down to 2442.00 had recovered back up to yesterday morning’s 2445.00 high ahead of pre-open econ reports — CPI and Retail Sales. They triggered a surge to fresh highs at 2449.00. Its reaction down through the open touched 2444.25 before bouncing to fresh highs again at 2450.00.

Consumer Sentiment, which is similar to the two pre-open reports, was due at top of hour. Was the post-open bounce simply anticipating a similar response to similar data? The same template describes yesterday’s post-open surge as Fed Chair Yellen appeared for her second day of Congressional testimony.

Reacting down into and out of the redundant report has bounced off of 2447.00. But not yet to a new high. The 2447.25 bias-up signal has triggered, putting into play the 2452.25 bias-up target. That attraction helps to offset the pre-open breakout originating too late to be reliable.

But be aware of potential to react down from within 3 ticks of the 2452.25 bias-up target. Meanwhile, back under 2447.00 at any time would signal momentum already reversing down.

Yellen testimony doesn’t seem surprising.

The overnight rally up to 2446.50 was retraced entirely before the open, which was greeted unchaged at 2441.00. Intraday buyers took their shot, but only reached 2445.00.

Well, not only. The post-open bounce also triggered the 2442.00 bias-up signal. But the grace period was avoided by only 1 tick. And without yet probing above the 10:15 high, 2442.00 was broken decisively through 10:30 to invalidate what 10:15 had triggered.

So, this is an invalidated bias-up environment. An offsetting test of the 2434.00 bias-down signal isn’t required. And 2434.00 isn’t required to define the window’s low if tested. My minimum objective below is 2437.50, which is probably too shallow if the entire session is spent backing-and-filling.

Exiting the bias environment back above 2442.00 would not necessarily point higher — the morning’s bias parameters are fixed. But it would suggest the backing-and-filling is being replaced by flat-to-higher.

Yellen’s remarks fuel pre-open / post-open surge.

This morning’s 2428.00 bias-up signal was already tested overnight after Europe’s opens helped to end a narrow range. Its brief consolidation resolved up sharply as the embargo was lifted on Yellen’s opening remarks for her House Congressional testimony. The open was greeted by a consolidation around 2435.50. Another surge extended the rally to attack 2443.00.

The highest candidate for containing the post-open surge is 2441.75. While testing it for more than a half-hour, it has been exceeded by 1 point, but only overlapped, while RSIs eventually diverged negatively. And now its pullback limit is being violated.

Back under 2439.50 would signal momentum reversing down (now being tested). Objectives include this morning’s 2433.00 bias-up target and 2430.50. Even the 2428.00 bias-up signal can be tested while remaining within the bias-up environment.

Gapping up this morning doesn’t prevent attempts to reverse the trend down, but helps to ensure that attempts will fail. Regardless of the substantial rally from yesterday’s close, avoiding any pullback would next target new highs above 2454.00.

Support contains early sellers again.

A pre-open bounce greeted the open up to 2424.50. Its reaction dipped sharply to probe the overnight low down to 2420.50, 1 point under this morning’s 2421.50 bias-down signal. That also happens to be a calculable inflection point, and probing it any deeper than those first 4 ticks would have reflected strong-handed sellers.

The setup is similar to yesterday, and so is its resolution. Support held, probably marginalizing sellers for the morning. Having held a test of the 2421.50 bias-down signal, an offsetting test of the 2428.00 bias-up signal is in-play. Fresh post-open highs are already testing 2425.00.

Exiting the bias environment back under 2421.50 would be credible for inserting a detour, but a detour is otherwise unlikely. Meanwhile, exceeding 2428.00 would suggest extending to probe above yesterday’s highs.