Post-open Review

Pre-open bounce resolves to fresh lows.

Bias-down triggered under 2422.25. Whether or not still being overlapped within moments of the 3-minute timing window around 10:15, the signal wasn’t invalidated at 10:30. The 2415.50 bias-down target is in-play.

Even with filling the gap back to Friday’s 2428.00 close to within 1 tick, post-open action has developed exclusively in negative territory. Before triggering bias-down, post-open action had probed the overnight low down to 2416.75.

Gap filled above, probe overnight lows, trigger bias-down, exclusively negative territory. None of which has prevented bouncing back up to 2425.25.

Just a detour? But the bias-down signal has one more chance to be invalidated. Exiting the bias environment at 11:30-noon back above this morning’s 2431.00 bias-up signal would invalidate the bias-down target. Otherwise, back under 2421.75 would resume the decline. The 2415.50 bias-down target’s test would likely include neutralizing oversold RSIs at Friday’s 2412.50 low.

All targets met. Now it’s only about objectives.

chaRTroom link: Adobe suddenly assigned our branded domain without any notice, and my chaRTroom links weren’t all updated. I apologize for the inconvenience, click here to enter.

Gapping up several points to 2434.50 wasn’t insubstantial, and it extended immediately to touch yesterday’s 2436.50 high. The prior high wasn’t yet recovered when the opening 15 minutes of volatility lapsed, but a pullback would still be attractive.

The calculable pullback objective at 2433.25-2433.75 was barely touched before reversing back up. And up, and up. The 2438.50 bias-up target is exceeded through 10:15 to renew the bias-up signal, next targeting 2445.00. Already, 2441.50 is being tested.

The only “unfinished business above” is a new high close. That became required by two setups last week. It’s what gave us high confidence that this week’s dip was only a temporary pullback. This being a Friday, a new high close today would also be a new trend high close, requiring yet another.

Friday Factors make the morning’s bias likely to persist through the noon hour. Seemingly, that would create a lot of room to absorb afternoon selling pressures without damaging the rally’s chart. Seemingly.

Post-open surge gets shut down, too.

The overnight rally had extended to probe yesterday afternoon’s 2432.75 high up to 2434.25. Both were above yesterday’s 2432.75 high. And all three reacted down.

Yesterday’s reaction down and the overnight pre-open reaction down measured about 4 points each. The post-open reaction down fell 7 points to 2426.50. And having held a test of the 2433.25 bias-up signal, an offsetting test of the 2425.75 bias-down signal was in-play.  It was probed by 3 ticks.

The pre-open and post-open choppiness is a compendium of reactions to ECB and Comey headlines. Their influence is likely  done. ECB members are at dinner. The Comey hearing has only just begun, but it is already over — all relevant revelations and reiterations are done.

There’s one more opportunity to reinstate the recovery being attempted by yesterday’s failed Pivot Reversal. If this morning’s no-bias environment exit isn’t yet attacking and then breaking either of the 2425.75-2433.25 bias signals, then this afternoon’s bias environment entry should. Anxiousness ahead of tonight’s headlines of Britain’s elections will try to prevent trending sooner, but expectations should be playing out soon after.

Post-open firming lacks enthusiasm.

The overnight rally up to 2433.25 had reacted down to attack 2428.00. It was recovered almost entirely before the open, and then probed up to 2434.50 post-open.

That’s still 2 ticks short of the bias-up signal. Which didn’t trigger. So, an offsetting test of the 2426.50 bias-down signal is not in-play. Not officially.

But our scenario already suggested that not gapping up above yesterday’s highs would remain vulnerable to fresh lows. Extending higher now would need to probe above the untriggered bias-up signal, which would be doomed to failure.

Bias-down avoided, struggling to exploit it.

The overnight test of the 2426.50 bias-down signal is clearly relevant. Piercing it by only an errant tick triggered the next bounce in an otherwise single-minded overnight decline. That  3-point bounce reacted down post-open, but stopped optimistically short of touching the pre-open low, and the bias-down target.

Was the single-minded overnight decline done? The post-open dip recovered to attack the 2432.00 bias-down signal as resistance. Then it was tested by 3 ticks. Another reaction down was recovered to fresh highs at 2434.25. Meanwhile, 2432.00 was recovered at 10:15 to trigger “no-bias.”

All of the chipping away at 2432.00 into and out of 10:15 and 10:30 hasn’t produced a break higher. In fact, 2431.00 was just touched. Again. Perhaps that dip only reflects anxiousness as a potential terror attack is reported at Notre Dame. Perhaps a similar inhibition has been preventing a recovery, since there were earlier reports from London Bridge.

At some point, even the strongest-handed buyers will let weak-handed sellers have the lower price that convinces them to buy. And the delay in testing 2426.50 would likely probe lower to 2424.25 or 2421.25.

Regardless, only an offsetting test of this morning’s 2438.25 bias-up signal will be in-play. I suspect any fresh highs would likely extend to new highs. Testing the bias-down target overnight and only attacking it post-open don’t qualify for also putting into play an offsetting test of its bias-up target. But new highs would be likely, anyway.