The First Trade

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

CHARTROOM LINK
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
Friday’s decline didn’t find an air pocket. But selling pressure was relentless, and traversed the entire 2230-handle, anyway. And it trended, in a series of lower lower lows and lower highs. Starting at the morning’s 2248.00 bias-up signal, with its sights set 2230.00-2232.00, the target was met, even probed by more than 1 point. A bounce tested the target range’s upper-end into and out of0 the cash session close up to 2237.25. No new objectives were created that weren’t also met intraday.

Overnight action’s new info…
Strong economic news from China and limited terrorist incidents over the holiday have combined to start off the new year strongly. Monday night’s open gapped up above Friday afternoon’s highs to 2241.00 and extended immediately to 2245.00. A 5-point pullback was recovered to fresh highs before midnight as the rally resumed into Europe’s opens. Peaking at 2251.50 was pessimistically short of Friday’s 2252.00-2253.00 pre-open highs. Resuming the rally again has extended to 2255.25, testing Wednesday morning’s “lower prior highs.”

If, then…
Attractions below at 2215.00 would have been in-play if today’s open were anything weaker than a gap above Friday afternoon’s 2239.00 high. Globex opened above it, extending far above it. Friday’s late drop is rejected, along with the traction sellers had gained, and its momentum is reversed up. Extending higher through the open could form a “session-long rally” setup targeting new highs. That’s not assured, as the open is currently indicated to test “higher prior lows,” and not extending higher through the open would more likely resolve in backing-and-filling through the morning. Regardless, a gap back at Friday’s 2236.50 close is now left outstanding below..

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2249.50 would be likely to renew the bias-up signal by also exceeding the 2245.25 bias-up target at 10:15. Exiting the open under 2246.00 would be unlikely to renew the bias-up signal.

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

CHARTROOM LINK
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
Thursday’s open was greeted at the upper-end of an overnight range that had been resisted by 2247.00. A brief overnight low had neutralized the attraction below at 2243.00. The open popped up to touch 2250.00. Holding its test through the opening 15 minutes of volatility made the 2248.75 bias-up signal unlikely to trigger. Trending back down into the noon hour probed fresh lows down to 2239.50. That held a test of the afternoon’s 2240.50 bias-down signal, and avoided discovering whether there is an air pocket any lower. The afternoon bias environment attacked its 2247.00 bias-up signal, and the balance of the session ranged sideways. No more “unfinished business below” remains outstanding.

Overnight action’s new info…
Only firming back to unchanged didn’t reverse momentum up. That hasn’t prevented overnight action from trending up. A probe above yesterday morning’s 2250.00 high by nearly 3 points eventually retraced to attack 2248.00 through Europe’s opens. But price is otherwise ranging narrowly around 2250.00.

If, then…
The last unfinished below was neutralized yesterday, but price only returned to unchanged. That’s not momentum reversing up. Now overnight action has firmed further, and the open is currently indicated to gap up to yesterday’s high. That’s not momentum reversing up, either. Avoiding another downleg today will require recovering yesterday’s high through the open, or at least triggering bias-up. The reward could be a 5-7 point air pocket above to 2255.00-2257.00. The alternative could resume the decline, and discover an air pocket below to 2230.00, on the way to 2215.00. There are unusual influences at year-end, unrelated to volume evaporating ahead of the holiday weekend, and unrelated to the normal Friday Factors.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2250.00 would be likely to trigger the 2248.00 bias-up signal at 10:15. Exiting the open under 2245.25 would be unlikely to trigger bias-up.

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

PROGRAMMING NOTE: TODAY’S PRE-MARKET TOUR WILL BEGIN 15 MINUTES LATE AT 9:10 AM ET.

CHARTROOM LINK
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
Wednesday’s 24-point plunge converted a gap up into a retest of prior lows.Such is the risk of one-sided overnight sentiment. The rally’s challenge was to immediately extend above 2266.50, but breaking immediately back under 2265.00 began signaling that had become unlikely. Bias-downs were signaled, targets were met, and also exceeded to put into play “unfinished business below” at 2243.00. Attacking it to within 2 ticks pre-close didn’t qualify as fulfilling it, but the close was in its orbit.

Overnight action’s new info…
Relatively narrow sideways ranging developed largely in positive territory. The 2245.00-2247.00 range eventually broke lower and slide down to 2242.25 at Europe’s opens. Firming since then has attacked 2247.00 as resistance.

If, then…
The attraction to 2243.00 has been neutralized. Barely piercing it doesn’t suffice for the retest of oversold RSIs, and doesn’t neutralize so much time and energy expended in the interim. Nevertheless, isolating its test to the overnight would be credible for launching a rally into the weekend. Isolating a deeper retest that recovers entirely during the open would be credible, too. Otherwise, not rejecting its post-open test could find an air pocket below. And trending down into the weekend would next target 2215.00 and 2205.00..

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2243.00 would be unlikely to trigger the 2242.00 bias-down signal at 10:15. Exiting the under 2248.00 would be unlikely to trigger the 2248.75 bias-up signal. Exiting the open above 2250.00 would be likely to trigger bias-up.

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

CHARTROOM LINK
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
Tuesday’s opening surge had renewed the bias-up signal by exceeding its 2266.00 bias-up target through 10:15. But probing it up to 2269.50 had left behind a corrective target below at 2264.75. And fulfilling it into the noon hour never recovered. Two timing windows ranged sideways up to 2266.75, and the position-squaring window slid to 2260.50 through the futures close. The cash session close equated to 2264.00, preserving enough of the open’s gain to prevent the closing action from reversing its uptrend.

Overnight action’s new info…
The Globex open abruptly began reversing Tuesday’s post-close slide without piercing the 2260.50 low. The rally peaked upon attacking Tuesday afternoon’s 2266.75 buy signal to within 1 tick, coinciding with Europe’s opens. Reacting down to attack 2264.00 was recovered entirely, but not yet extended any higher.

If, then…
All of yesterday’s late slide been retraced not only back up to its 2264.75 sell signal, but also up to the afternoon range’s 2266.75 upper-end. Actually, only to within 1 tick. And that was several hours ago, without yet reversing down. If this is optimism, then it is restrained. At least it confirms the late slide was weak-handed and not predictive. None of which assures that yesterday morning’s rally will resume today. But the rally should resume this morning if it’s going to resume this week, and if a deeper slide is going to be avoided. And it should resume this morning so long as the open doesn’t gap down under 2259.00. Resuming the rally would target a retest of the 2273.00 high, up to 2275.50 or 2278.25. Sliding any deeper would target a probe under last Thursday and Friday’s lows below 2249.50 and 2243.00..

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2268.75 would be likely to trigger the 2266.50 bias-up signal at 10:15. Exiting the open under 2264.00 would be unlikely to trigger bias-up.

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

CHARTROOM LINK
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
Friday’s open was essentially flat around 2257.00. Thursday night, like Wednesday night, had rallied briefly up to 2261.00. But intraday Friday, like intraday Thursday, had traded only lower. Friday’s low was nearly 3 points higher than Thursday’s, and also satisfied its 2254.00 to within 1 tick. Three days of holiday weekend illiquidity didn’t attract sponsorship for resolving in either direction. But a last-minute surge to 2260.25 greeted the weekend.

Overnight action’s new info…
Last night’s narrow 2-point range has suddenly, and only recently, surged 3-1/2 points to 2261.50. That’s above both Thursday and Friday’s ranges, and above the two overnight ranges preceding them. This morning’s 2261.25 bias-up signal is resisting the surge. It’s also a third consecutive overnight higher high — the prior two were rejected before the open, and now RSIs are diverging negatively on this one.

If, then…
Low-volume environments can form patterns, but none are very predictive. That would apply equally to Friday’s late surge, as it would to Thursday’s opening slide. Today’s open is in position to be greeted unchanged from Wednesday’s close, when a Symmetrical Triangle had just begun breaking lower. If Thursday and Friday were the pattern’s false break, then a relatively larger rally can reveal itself at any time. Delaying it until late-morning for a shallow dip would be possible, but another downleg this morning wouldn’t be appropriate unless today is trending down.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2264.00 would be likely to trigger the 2261.25 bias-up signal at 10:15. Exiting the open under 2259.00 would be unlikely to trigger bias-up.