The First Trade

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

NEW 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…
REMINDER: The ES front-month rolls forward at Thursday’s open to Jun, which is trading at a 3.00-3.25 discount to Mar. So, Tuesday night’s low touched relevant support at 2356.50 (basis Jun, 2359.50 basis Mar). The bias parameters are quoted in Jun… Yet more fresh lows had been probed Tuesday night, to the next lower objective at 2356.50 (basis Jun, 2359.50 basis Mar). Rallying from there isolated the probe under Tuesday’s lows to the overnight, opening back above Tuesday’s lows at 2367.00. But extending another 3 points higher held the bias-up signal instead of triggering it. The balance of the session trended back down to 2357.75 into the close.

Overnight action’s new info…
Tuesday’s last pattern had resembled an inverted Head & Shoulders, which I had dismissed for its undeveloped head and oversold RSIs. Ranging flat-to-higher overnight did attack 2364.00, but that has been reversed to probe back under yesterday’s late lows down to 2356.75. That’s 1 tick short of touching Tuesday night’s low.

If, then…
Are five consecutive sessions of lower lows about to break through six consecutive sessions of lower prior highs? Retracements often test lower prior highs before resuming the trend. That’s usually done within 1-2 sessions. But the last three sessions have been testing those lower prior highs, reacting up only temporarily. And now Tuesday’s night’s low is likely to be probed by a couple of points. Suddenly plummeting Crude Oil has been influential, as has been anxiousness ahead of this morning’s ECB rate decision / Draghi press conference. My Crude Oil targets are still lower, but a corrective bounce should begin by this afternoon. And the ECB event is likely to be benign, so getting it behind us could be a relief — as in relief rally. But look out below if not, and if early selling isn’t easily absorbed.

First Trade…
[Click here to view the Bias parameters] NOTE: I’ve lowered the bias-down target, and recalculated the SPX spread… Exiting the open at 9:45 above 2356.50 would be unlikely to trigger the 2355.25 bias-down signal at 10:15. Exiting the open under 2354.50 would be likely to trigger bias-down.

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

NEW 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 gapped down and probed fresh pullback lows at 2366.25. Holding the bias-down signal after the grace period put into play an offsetting test of the morning’s 2377.50 bias-up signal. A surge came within 3 points (not ticks) at 2374.75 before peaking, then retracing almost all of the recovery, leaving “unfinished business above.” And that was only the morning’s bias environment. Ranging sideways back up to 2372.00 almost lasted the balance of the afternoon. But the last half-hour slid briefly to test the next lower objective at 2364.00-2365.00..

Overnight action’s new info…
Despite bouncing into the close, Tuesday’s late break resumed steadily until touching the next lower objective at 2359.50. Ranging sideways formed a Symmetrical Triangle to greet Europe’s opens, which triggered a breakout that was retraced back to unchanged at 2367.50.

If, then…
Each session’s lower low reflects sellers expending more energy. So, the question is whether they’re gaining traction for the effort. Is this a temporary correction that will at least retest the highs, or is the trend reversing down. The last two sessions have closed back up within the prior session’s range, albeit closing negative. Obviously, that’s not a buy signal, as probing fresh lows continues. The “lower prior highs” being tested this week can launch a rally leg. But the window isn’t open indefinitely, and not yet exploiting the retracement can suddenly attract new sponsorship. Having probed under yesterday’s lows to a relevant level, isolating that to the overnight would be credible for launching a multi-session recovery. Otherwise, the trend may be reversing down.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2362.25 would be likely to trigger the 2363.75 bias-down signal at 10:15. Exiting the open above 2368.25 would be unlikely to trigger bias-down. Exiting the open above 2372.00 would be likely to trigger the 2370.75 bias-up signal.

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

NEW 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 slide probed under Friday’s lows to fulfill downside attractions at 2372.25 and 2368.50. The probe also began tracking a bottoming template that had begun with Friday’s failure to recover from fresh multi-session lows. The template continued tracking with Monday afternoon’s recovery to fresh session highs at 2378.00, closing above the morning’s high. And the recovery gained traction through the bias environment exit and the proxy window trending. Monday’s close was still negative, which isn’t necessarily bearish, but a recovery isn’t yet reliable..

Overnight action’s new info…
Dipping 3 points into Monday’s 2375.00 cash session close extended down to
2370.50 at the Globex open. Bouncing 5 points to test 2375.00 as resistance has reacted down to within 1 tick of the Globex open’s 2370.50 low.

If, then…
Resuming the rally doesn’t require gapping up this morning since yesterday’s rally gained traction for its efforts. Gapping down would still be likely to recover. Trending down through the open — or triggering bias-down — would make a recovery difficult. A recovery’s first objective is to test 2381.50, and extending higher would eventually target 2404.50 and 2418.00. Resuming the decline would instead target 2364.00-2365.00 below.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2368.50 would be likely to trigger the 2369.75 bias-down signal at 10:15. Exiting the open above 2372.00 would be unlikely to trigger bias-down.

Proper context can start the day with a solid win and make all the difference.
NEW! Market Tour transcript included at the end of this post…

NEW 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…
Friday’s opening 3-point surge to 2282.00 was reversed by a 7-1./2 point plunge that attacked the 2373.75 overnight lows to within 2 ticks. So, its 2372.25 late bias-down target became “unfinished business below.” Trending back up to probe a couple of points above the morning’s high was interrupted once by a wide swing between 2276.00-2281.00 that suggests volatility is expanding. But a sell signal came too late to produce a break back under Thursday’s 2280.25 close.

Overnight action’s new info…
The bullish scenario that I described in Friday’s Market Wrap is trying to play out. Trump’s Saturday morning tweets may take some credit, undermining his legislative agenda, including tax reform that inspired much of the rally. North Korea firing four rockets stirred the pot. Either catalyst will suffice. Sunday night’s open plunged to 2 points under Thursday night’s 2373.75 low, and quickly bounced back up to it. Hours of ranging there narrowly greeted Europe’s opens, where a new dip touched 2268.75. Now its reaction up is testing 2276.00.

If, then…
A fresh low became likely after Friday’s failure to reverse its fresh trend lows back above the morning’s high. And while a shallow dip to 2372.25 could have resolved the pullback, the delay would likely be compensated by extending down to 2368.50. Which has been tested to within 1 tick. Isolating it to the overnight would likely reverse momentum up, potentially extending to new highs targeting 2405.50 and 2418.00. Otherwise, not already recovering at the open should extend down to test 2364.00, too.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2377.75 would be likely to avoid triggering the 2375.00 bias-down signal at 10:15. Exiting the open under 2373.00 would be likely to trigger bias-down.

Phonetic dictation…
[NEW! Unreviewed voice-to-text real-time dictation of the Market Tour recording. Again, not reviewed or edited in any way, which can be equally confusing and humorous.] Sorry, the online dictation facility was not responding this morning.

Proper context can start the day with a solid win and make all the difference.
NEW! Market Tour transcript included at the end of this post Sorry, technical error today…

NEW 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…
Overnight weakness had extended post-open to trigger Thursday’s 2389.25 bias-down signal. Failing to limit a temporary pullback to 2387.25 had put into play lower objectives. Opportunities to negate the extension failed, the last being a surge to 2388.00 that only stretched the rubber band for a 10-point drop to 2378.00 at the close.

Overnight action’s new info…
Thursday’s last drop to 2378.00 was initially consolidated into a Descending Triangle. Its eventual break fell relentlessly until touching 2373.75. Bouncing less than 3 points was retraced entirely, but the low’s retest reacted up to attack 2379.00.

If, then…
Overnight lows have at least touched the upper-end of the next lower objective in-play at 2372.25-2373.75. If a shallow pre-open bounce from its test proves premature, then resolving down could hold the objective’s lower-end. And extending deeper would next target “lower prior highs” at 2368.50 or 2364.00. A bigger pre-open bounce that greets the open in positive territory could isolate the probe to the overnight, and trend higher through the morning. This being a Friday, the morning’s bias tends to persist through the noon hour.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2376.00 would be likely to trigger the 2378.50 bias-down signal at 10:15. Exiting the open above 2383.25 would be unlikely to trigger bias-down.