Post-open Review… Momentum slows, the pendulum swings..

Pre-open dip stalls the rally.

Yesterday’s lower open was the rally’s tool to replenish its energy. Holding a test of its bias-down signal through 10:15 had indicated that sellers were weak-handed — impatient and ineffectual — and trapped. Their scrambling to cover shorts or to re-buy helped to fuel the intraday recovery to new highs.

Yellen’s congressional testimony helped, too. Anticipation for it to be repeated today is probably responsible to some degree for the overnight surge to 2340.00. Already having discounted that is probably also responsible to some degree for trending down before the open.

And like a swinging pendulum, retracing that discount allowed it to reappear as Yellen’s appearance got closer.

In fact, the pre-open dip down to 2331.25 bounced through the opening 15 minutes of volatility to test the 2334.25 overnight high. Releasing her embargoed opening comments had no more bullish impact on prices, and the 2336.50 bias-up signal wasn’t even touched.

This is a no-bias environment. Neither bias signal requires being tested, because neither was tested already post-open.

That isn’t preventing a probe above the 2336.50 bias-up signal anyway. The open hovered at or under yesterday’s 2335.50 cash session close, but didn’t extend down. A bounce just touched 2338.00. It’s origin makes it “no-bias trending” that is doomed to failure. That doesn’t prevent a sizable detour to and/or through the 2340.00 overnight high to 2343.00-2344.00.

Back under 2334.75 at this point would signal the 2336.50 bias-up signal’s test had held. It wouldn’t require trending down, since no offsetting test of the bias-down signal is required.