Post-open Review… Double-edged sword.

Liquidity challenges make recoveries difficult, too.

The open gapped down under yesterday’s lows, to the 2381.00 overnight lows. A blip-down reacted back up to the 2383.50 bias-down signal. But it resolved down to fresh lows at 2379.00.

Another bounce on econ reports stopped short of the bias-down signal. Triggering cleanly didn’t hasten the decline. But it did resume, and with a vengeance. Attacking 2383.50 to within 3 ticks suddenly collapsed 7 points to 2375.50.

The 2378.00 bias-down target is met. So is Monday’s unfinished business at 2377.25. The predictable is done.

Recall the relevance of 2375.00. Recovering it last week for two consecutive sessions had put into play new highs. Delaying this correction doesn’t prevent that, but there’s room to retest 2375.00 down to 2374.00 or 2371.50.

Nothing has changed in this week’s global liquidity challenges. It inhibited yesterday’s trending, and similarly exacerbating this morning’s trending. The sponsorship is the same, so this morning’s trending is likely to be retraced.

Meanwhile, liquidity will soon become even more challenged ahead of this afternoon’s FOMC policy statement. A knee-jerk reaction probing under 2375.00 would be likely if not done before then, or if not already recovered back above yesterday’s lows. Actually trending down this afternoon is possible anyway, but not the likeliest resolution.