Post-open Review… Anchoring.

Gap up extends through relevant window.

Having failed to gain traction yesterday, resuming the rally this morning required gapping up. Bottoming was already sufficient to have ended the 2-week old pullback and backing-and-filling was sufficient to have formed a base. So, the rally was likely to resume today, making the open likely to gap up.

Which it did, decisively, 5-points above yesterday’s 2900.00 high. Halfway through the opening 15 minutes of volatility, not yet rejecting the gap up, post-open action surged. It easily exceeded the 2905.75 bias-up target to renew the bias-up signal.

The renewed bias-up target is 2915.50 which was ultimately attacked up to 2912.00. China trade news has triggered a knee-jerk reaction down to 2906.00 that has extended lower to test 2902.00. Back above 2905.50 would signal that the rally had resumed.

A slightly deeper pullback is possible while still being likely to recover. Preferably and usually, at this “obvious” stage of the recovery, optimism will prevent touching yesterday’s 2900.00 high. Any lower would undermine the recovery — probably not at risk of reversing momentum down, but inserting another round of backing-and-fillnig.