Pre-market Tour

The pre-open rally has extended to 2056.75. This is where the German soccer match terrorist attempt was announced. But now, having fully discounted it the reaction back up to its origin, there is potential for another dip. I would expect the gap back down to yesterday’s 2049.00 close to hold its test. Otherwise, if not already dipping through the open’s first bars — let alone through the first 15 minutes — the trek to fresh highs and 2068.00 should be obvious quickly.

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It’s not quite “Alien vs. Predator,” but Fibonacci vs. Fibonacci can be as exciting to a market technician. The overnight rally to 2059.52 formed a Head & Shoulders that reached its 161.8% extension. That reigned in some of the rally’s optimism, which could be bullish from a contrarian perspective. But its reaction up already retraced 61.8% back to the overnight high, which is a normal correction, and potentially bearish from the same contrarian perspective. Exciting! The battle lines have been drawn at 2053.50 and 2058.00, and probing either one further than its first 3 minutes would be likely to extend in that direction.

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The overnight recovery up to 2025.75 has reacted down pre-open to attack 2015.00 as support. That’s under Friday’s low, making 2012.00 likely to be tested post-open. If so, its resolution at 9:45 could dictate the balance of the morning, if not the entire session.

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After testing the 2034.50 bias-down target, a bounce to 2038.50 greeted 8:30’s econ reports. Its reaction blipped-down to a fresh low at 2033.50 and back up again to a fresh high at 2040.00. Just opening in positive territory above 2041.00 and extending higher could isolate selling to the overnight window so the morning could rally throughout. The 2039.75 bias-down signal could be recovered, regardless, to marginalize sellers for the morning, if not the day. But not already rallying through 9:45 or 10:15 would still be vulnerable to resuming and extending the decline.

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Another bounce was resolved in fresh session lows. The “unfinished business below” at Tuesday morning’s 2062.75 bias-down target was met, consolidating there. Today’s first Fed speaker then praised the economy and higher rates, triggering a slide to 2055.25. This area is essentially the renewed bias-down target if the 2062.75 bias-down target isn’t recovered through10:15. So, recovering from 2056.50 is an opportunity to prove the rate hike’s effect has been discounted for now. Otherwise, a new downleg is underway. A minefield of Fed speakers is scheduled today. We’ll be monitoring the market’s reaction for any sign that their warnings have been discounted.

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