The First Trade

Proper context can start the day with a solid win and make all the difference.

DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close…
Sunday night’s open had gapped up above all prior highs for the second consecutive week, triggered by a last-minute Trump China trade tweet, also for the second consecutive week. The rule of alternating resolutions ruled out extending higher. The overnight pullback from attacking 2820.00 to test 2810.00 still allowed for a post-open retest of the overnight high, but it was only attacked while fulfilling the morning’s 2817.50 bias-up target. Monday morning’s late bias-up signal didn’t prevent trending down sharply to exit the bias environment under its bias-down signal, negating a retest of the bias-up signal. Extending through the noon hour to 2767.50 encompassing all of the prior 6 sessions. The afternoon bounce retraced half of the earlier high-to-low drop, ending at 2792.00, and proving this rally has been probing thin air.

Overnight action’s new info…
Monday afternoon’s recovery up to 2794.50 began retracing back down through the futures close and into the Globex open, eventually attacking 2785.00. All of which was recovered to greet Europe’s opens back at 2794.50. Extending higher this time to 2799.00 is now trying to hold 2794.50 as support.

If, then… (notes to accompany the Tour recording)
Yesterday’s plunge was quite a shock to the system. That can inhibit and squelch volatility, but usually not until 1-2 days more of shock. And not necessarily in a straight line, or even back to either end of yesterday’s very wide range. The extended bounce described at yesterday’s close has developed overnight, but that doesn’t reverse the trend up. The greeting given the last two rallies up to 2803.00-2805.00 suggest peaking there if tested, without first having to be probed. Regardless, there is no “unfinished business” above, but that doesn’t necessarily resolve in an immediate collapse. Meanwhile, there was no bullish reason yesterday to revisit last Wednesday’s test of 2777.00 support, which now has less support if met again. Emphasis on “if met again,” since yesterday afternoon’s recovery did avoid a closing under Wednesday’s low, which Monday’s new high has made the new line in the sand for signaling a trend change.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2795.50 would be unlikely to trigger the 2798.25 bias-up signal at 10:15. Exiting the open above 2800.50 would be likely to trigger bias-up.

Proper context can start the day with a solid win and make all the difference.

DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close…
Thursday night’s relentless rally from 2782.75 had extended 20 points to 2803.00. And that was before a last-minute surge through the open extended to neutralize the “unfinished business” back to Monday’s 2807.75 opening gap. Obligatory resistance was expected, but its reversal nearly retraced all of Thursday’s close down to 2787.00 by noon. The balance of the session rallied back up to within 3 ticks of the open’s high, closing at 2804.50.

Overnight action’s new info…
Another last-minute Trump China trade tweet triggered a buying frenzy at Sunday night’s Globex open. Gapping up to 2814.00 quickly extended to attack 2820.00. I added a warning to the chaRTroom screen that since last week’s similar setup had held up and eventually extended this sequential Sunday’s similar setup would be vulnerable to reversing down. And the balance of the night has only trended back down, through midnight and Europe’s opens, probing below the earlier Globex low to 2809.50.

If, then… (notes to accompany the Tour recording)
Friday afternoon’s recovery was slightly less likely to reverse down immediately, likelier to first extend higher. Having missed the opportunity Friday morning for being satisfied with only an attack on last Monday’s 2814.00 high to 2812.50, extending higher had become likely to probe fresh highs up to 2817.50. So, Sunday night’s gap up has neutralized upside attractions. Being a similar setup to last Sunday suggests resolving differently by Monday’s open. This week’s instance lacks the complexity to form a “new Globex trend extreme” requiring intraday retest, but the setups are still comparable. I’ll be reluctant to sell prior to its retest so long as the open remains within the overnight high’s orbit, which begins above the open’s 2812.00 opening low. The area below it down to Friday’s ~2808.00 highs is a gray area, but exiting the opening 15 minutes any lower would be treated as a bearish Globex-flip — likelier to trend down this morning.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2808.00 would be unlikely to trigger the 2809.75 bias-up signal at 10:15. Exiting the open above 2812.50 would be likely to trigger bias-up.

Proper context can start the day with a solid win and make all the difference.

DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close…
Thursday’s market was range bound without any of the week’s earlier volatility catalysts. Range bound, but still choppy, resisted by 2793.00-2794.00. An overnight swing down to 2781.75 was nevertheless contained within Wednesday’s range, which contained Thursday morning’s swing down to 2783.50. The afternoon’s swing was even narrower, although the last 3:37-3:52 Position-squaring window collapsed momentarily to pierce the morning’s lows at 2782.75. Gapping down and ranging exclusively in negative territory suggests that weak hands are bearish, meaning strong hands are bulls. Not quite a buy signal, but reinforcing an immediately bullish move Friday. The narrowing extended range has limited predictive value otherwise.

Overnight action’s new info…
Immediately bullish moves don’t get much more immediate than this. Thursday’s late dip had bounced 6 points through the close to prove its weak-handed sponsorship. Globex immediately dipped back down to attack the late intraday low to within 1 tick, but no lower, and immediately began recovering. Thursday’s highs were soon probed up to 2795.50, and then to 2798.50, hovering there through midnight. Another push higher to 2802.50 just after Europe’s opens immediately began hovering there, too.

If, then… (notes to accompany the Tour recording)
March is coming in like a lion, and that’s not just a favorable comparison to yesterday’s inside day. The post-close Market Tour pointed out that with Thursday’s narrowing range behind, and weekend illiquidity ahead, credible trending would have to appear sooner rather than later Friday. Based on the overnight levels of influential resistance, the pattern’s next higher objective would neutralize the outstanding gap back up to Monday’s 2808.00 open. One challenge in this setup will be in attracting post-open reinforcements, which is hardly assured after having trended relentlessly overnight. That resolution will then be influenced by Friday Factors, which help the open’s bias to persist through the noon hour. Bias-up seems very likely to trigger, but not necessarily bias-up renewed.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2796.00 would be unlikely to exceed the 2798.00 bias-up target at 10:15 or to renew the bias-up signal. Exiting the open at 9:45 above 2800.50 would be likely to exceed 2798.00 at 10:15 and renew the bias-up signal.

Proper context can start the day with a solid win and make all the difference.

DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close…
Tuesday night’s drop to 2780.50 had stabilized 7 points higher, but that was still under Tuesday’s close and in negative territory. A post-open surge to 2792.50 essentially erased both, but only momentarily before collapsing to test the next lower objective at 2777.00 thanks in part to China trade headlines. The objectives test and retest were isolated to the bias environment, inhibiting more sponsorship for the day. The balance of the session rallied up to 2796.25, back in positive territory and above the open’s initial high. The cash session close was still overlapping Tuesday’s 2791.50 open and close, part of the problem that had led to Tuesday night’s decline.

Overnight action’s new info…
Post-close action had extended another point up to 2797.25, which the Globex open quickly rejected on the way back down to 2790.00. Hovering there shallowly through midnight began accelerating the pullback to attack 2781.50 into and out of Europe’s opens. RSIs diverged positively to enable a bounce that has been testing and retesting 2788.00.

If, then… (notes to accompany the Tour recording)
Yesterday’s recovery had stopped short of levels that would ensure extending higher without delay. But it recovered enough to allow room for a reaction down to be only a temporary pullback, without yet extending the decline to 2754.00. The overnight drop so far is contained entirely withing yesterday’s range, and nothing yet requires probing either end of it. But both bias-down parameters have been attractive, and the 10:15 resolution to their test might be the next signal either way.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2791.50 would be unlikely to trigger the 2788.00 bias-down signal at 10:15. Exiting the open under 2784.25 would be likely to trigger bias-down. Exiting the open under 2780.50 would be likely also to exceed the 2781.50 bias-down target through 10:15 to renew the bias-down signal.

Proper context can start the day with a solid win and make all the difference.

DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close…
Monday’s reversal from its 2814.00 recovery high had extended down overnight to 2783.25. Perhaps it was a the product of anxiousness ahead of Tuesday morning’s Fed Chair Senate testimony. Firming back up to 2791.50 at the open put into play a test of 2802.00, which was met at the 2803.25 late-morning high. A mid-day dip was recovered coming out of the environment to retest the morning’s high. But no higher, and the last half-hour trended back down to 2791.50, flat with the open.

Overnight action’s new info…
Tuesday’s late slide didn’t hesitate before extended lower to quickly print 2786.50, or before reacting back up to 2791.50 resistance. Not very interesting until trading on the CME was halted around 7:40 pm ET, leaving a 3-hour hole in the charts. Testing 2793.25 before and after midnight collapsed to test and retest Monday night’s 2783.25 low. Bouncing 4 points through Europe’s opens was resolved back down again, this time to test Friday afternoon’s 2781.50 low. Now another bounce is testing 2786.00.

If, then… (notes to accompany the Tour recording)
Retesting Monday night’s dip isn’t surprising. Yesterday’s intraday recovery was rewarded only with choppy sideways ranging. Its retest by proxy or by probe was likely. Opening back above Tuesday’s 2789.50 low could isolate the weakness to help launch a retest of Monday’s highs. Otherwise, lower lows have room down to 2777.00 before suggesting the drop from Monday’s highs is heading for 2754.00. The catalysts for volatility still include today’s 10:00am Fed Chair testimony, Turmp’s Hanoi visit, and escalation of the India-Pakistan conflict.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2781.50 would be likely also to exceed the 2784.25 bias-down target through 10:15 to renew the bias-down signal. Exiting the open under 2788.00 would be likely at least to trigger the 2790.75 bias-down signal at 10:15. Exiting the open above 2794.00 would be unlikely to trigger bias-down.