Institutional Research Memorandum

Initial Balance Break / Extension Regimes.

A conditional-probability study of whether the RTH auction closes above or below Initial Balance midpoint after one-sided IB breaks and mutually exclusive extension buckets.

Opens the IB break / extension Python script, not the late-day auction script.
Instrument
MNQ
Sample
1,155 sessions
IB Window
09:30–10:30
Outcome
RTH Close vs IB Mid
Interval
Wilson 95% CI

Result Snapshot

96.71%

P(IB high or low breaks) across 1,155 sessions.

Executive Finding

The Initial Balance break itself is not rare. The actionable information is whether the auction remains one-sided and how deeply it extends beyond the IB. Once the market produces a high-only IB break, the close above IB mid occurred 94.46% of the time. Once the market produces a low-only IB break, the close below IB mid occurred 88.38% of the time.

The IB midpoint behaves as an auction-acceptance reference. In one-sided extension regimes, fading back through IB mid is historically low probability, especially once extension reaches 75% or 100% of the IB range.
Core Base Rates

Initial Balance break structure.

Conditional ProbabilityNCountProbabilityWilson 95% CI
P(IB hi or lo break)1,1551,11796.71%95.52–97.59%
P(only IB hi breaks)1,15546940.61%37.81–43.46%
P(only IB lo breaks)1,15541335.76%33.04–38.56%
P(both breaks)1,15523520.35%18.12–22.76%
P(close above IB mid | IB hi break only)46944394.46%92.00–96.19%
P(close below IB mid | IB lo break only)41336588.38%84.93–91.12%
Mutually Exclusive Extension Buckets

Upside one-sided acceptance regimes.

ConditionNCountProbabilityWilson 95% CI
Close above IB mid | hi-only + 25% ext, no 50%958690.53%82.97–94.94%
Close above IB mid | hi-only + 50% ext, no 75%10610094.34%88.20–97.38%
Close above IB mid | hi-only + 75% ext, no 100%848398.81%93.56–99.79%
Close above IB mid | hi-only + 100% ext103103100.00%96.40–100.00%
Mutually Exclusive Extension Buckets

Downside one-sided acceptance regimes.

ConditionNCountProbabilityWilson 95% CI
Close below IB mid | lo-only + 25% ext, no 50%645484.38%73.57–91.29%
Close below IB mid | lo-only + 50% ext, no 75%847386.90%78.05–92.53%
Close below IB mid | lo-only + 75% ext, no 100%595898.31%91.00–99.70%
Close below IB mid | lo-only + 100% ext13012999.23%95.77–99.86%
Risk Application

Use IB mid as regime invalidation, not decoration.

After a one-sided IB break with material extension, the market has historically shown strong closing acceptance on the same side of IB mid.

High-only 75% or 100% extension

Bullish acceptance regime. Maintain upside bias unless IB mid is lost.

Low-only 75% or 100% extension

Bearish acceptance regime. Maintain downside bias unless IB mid is reclaimed.

Both-side IB break

Treat as rotational or failed-auction risk.

25% extension

Directional, but weaker. Bias input, not stand-alone conviction trigger.

Educational research only. Not financial advice. Historical probabilities do not guarantee future results.