Post-open Review… Sentiment extreme, after all.

Pre-open dip extends too low and for too long, but is that phase done?

As we discussed during the pre-market Tour, resuming the overnight rally above 1961.00 would be likelier if its reaction down could stay away from 1952.00 or at least reject its test quickly. It did neither.

But the test of 1952.00 did eventually try to recover. It peaked at 1959.25, whose recovery would have confirmed the pre-open dip had failed. Testing its resistance so late served a different purpose, reversing down to fresh lows under 1950.00.

The consequence to a sentiment extreme was a pullback to 1944.00. Not suffering the consequence this morning would have required a deeper consequence later. But 1944.00 has been touched, offsetting the extreme sentiment’s optimism with pessimism.

Exiting the bias environment under the low of 1944.00‘s test (which happens to be 1944.00) would suggest the that a deeper consequence lay in store, anyway. Meanwhile, the nearest buy signal is currently 1950.50.