Post-open Review… The downside of up.

Gap up scares away strong-handed reinforcements.

Gapping open beyond all prior sessions during a trend can be the inverse of a standing stop. Standing stops are opens in mid-range, no likelier to resolve in one direction than in the other. Similarly, gapping open beyond all prior sessions is equally likely to resolve in one direction or the other.

After extending to fresh highs pre-open, I was able to warn the chaRTroom of the unlikelihood for getting a reliable early signal. The opening 15 minutes of volatility probed higher several times, but kept returning to its 2807.75 opening print. Overnight buyers had not attracted reinforcements.

A buy signal’s inflection point at 2810.00 was overlapped plenty, only once by at least 4 ticks, and never beyond its 4-minute high. Its reaction overlapped a sell signal’s 2807.00 inflection point without exceeding its 4-minute low. The back-and-forth repeated with 2 more inflection points, and their tests only confirmed pre-open suspicions that an early signal would be difficult.

The sell signal’s retest was finally productive, exceeding its 3-4 minute low, even if only by a couple of errant ticks. And its test included the first detached bar. Rejecting the test would require such strong-handed sponsorship that a probe of fresh highs would be in-play. The dip has been violated, and a probe of fresh highs is now likely in-play, and likely targeting 2813.50. (Just met it.)

Quickly rejecting detached bars at the low’s retest gave us confidence in a reversal developing, rewarding both patience and limiting exposure to earlier signals per the warning. The new warning is more of a reminder, that still nothing requires extending any higher. Another downdraft would target 2802.00, and still require testing the 2807.75 opening print from below before a durable decline could be credible.