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…
Friday’s 2765.00 open was 10 points above Thursday’s high. But that was modest compared to being 35 points above the overnight low, having rallied relentlessly since Europe’s opens. The balance of the session was a choppy 10-point range between 2763.00-2773.00, until the position-squaring window surged to 2777.50 through expiration. WedEX had no bearish influence, so it’s not required to have a bearish influence Tuesday morning unless the open were to gap down deeply enough. Meanwhile, closing above 2757.00 and 2751.00 suggests the rally since Christmas is more than a temporary bear market correction.

Overnight action’s new info…
Sunday night’s open spiked up 5 points to 2782.50. It reacted down almost immediately to begin a directionless range between 2773.00-2780.00 that persisted through all of Monday’s abbreviated session, and well past midnight. Then, as if an alarm clock sounded, the market seems to have awoken from its slumber. Trending was finally attempted soon after Europe’s opens, so far dipping down to 2766.75 (testing this morning’s bias-down signal) where RSIs have diverged positively. The break from an otherwise sideways range comes too early to ensure it’s false and any likelier to recover.

If, then… (notes to accompany the Tour recording)
Topping here need not immediately reverse the trend down noticeably, but it probably needs to stop rallying immediately. Friday’s underperformance by NDX and outperformance by the Dow makes a bigger rally leg from here suspect. Otherwise, historically a fresh trend extreme close on expiration like Friday is usually exceeded, and a fresh trend extreme close on Fridays usually requires an eventual higher close. Both could be considered anomalies by gapping down deeply enough to reinstate WedEX’s bearish influence. Not only triggering bias-down but also gapping under Wednesday’s 2762.00 prior highs to form an Island out of Friday’s range, if not also under 2757.00 and/or 2751.00 to reject Friday’s close above them and help to prevent a second consecutive confirming close. Meanwhile, trying to reject Friday’s bullish elements, but not, could be as bullish intraday as the rejection would have been bearish. Similarly, testing bias-down without triggering it would put into play a probe above Sunday night’s highs.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2766.25 would be likely to trigger the 2767.75 bias-down signal at 10:15. Exiting the open above 2772.75 would be unlikely to trigger bias-down.

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…
Snatching defeat from the jaws of victory! An overnight rally had postured Thursday’s open to challenge Wednesday’s 2762.00 high only 90 minutes earlier. Then headlines triggered a plunge through Wednesday’s 2754.00 close on the way down to 2736.50. Extending down post-open to 2730.25 created an anchor that would doom to failure any subsequent bounce. That didn’t prevent rallying up to 2755.25 through the noon hour, but it did limit any higher high to a blip-up to 2758.25. Finally, the bounce began retracing as the last half-hour fell to 2743.00-2744.00.

Overnight action’s new info…
The bounce continued unraveling through the Globex open to retrace Thursday’s 2739.50 open. The fall extended to probe 5 ticks under Thursday’s low to 2729.00 just before Europe’s opens. And that was the end of that. Rallying since then has recovered into positive territory to test the 2744.50 earlier Globex high up to 2749.25.

If, then… (notes to accompany the Tour recording)
The anchor at yesterday’s low had doomed the subsequent rally. This setup is now neutralized by having probed a fresh low, and its intraday retest isn’t required. Often a new downleg under it would have developed to compensate for the delay, and may yet develop. Meanwhile, a couple of rally setups are trying to form overnight. Probing yesterday’s low overnight and not retesting it this morning could form an Isolation setup by not probing yesterday’s low through the open. More influential than that would be a Globex-flip setup, which also rejects the overnight probe by opening back above the 2744.50 earlier Globex high (now being tested). The latter setup can be as bearish as it would have been bullish if the opportunity to trigger is presented AT the open, but isn’t exploited THROUGH the open.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2744.50 would be unlikely to trigger the 2741.25 bias-down signal at 10:15. Exiting the open under 2746.75 would be unlikely to trigger the 2753.00 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…
Wednesday’s gap up to 2753.00 quickly extended back up to the 2757.00 “new Globex trend extreme” that had formed overnight. And through it to 2762.00. The bear market rally’s last calculable target at 2751.00 was officially neutralized, along with its room for noise up to 2757.00, both overnight and intraday. The first reaction down attacked the 2753.00 open before bouncing back above 2757.00. The second reaction down touched Tuesday’s 2748.00 high before bouncing back above 2757.00. Like the two bounces before it, price reacted back down. The close bounced off of 2751.00 to overlap the 2753.00 open.

Overnight action’s new info…
Probes lower and lower eventually touched 2745.50 before reversing up. And up. Peaking in a 4-point surge up to 2763.00 at Europe’s opens, its reaction down has bounced 4 points off of 2754.25.

If, then… (notes to accompany the Tour recording)
Thursday is being greeted with no “unfinished business,” and no upside momentum intact. Still overlapping the 2753.00 opening print at the close reflects inertia. That often occurs at a trend extreme, but holding 2751.00 and 2757.00 through the close doesn’t qualify as their rejection. Gapping up today above yesterday’s 2762.00 high could reinstate the upside, for which overnight action has created the predicate. Of course, forming a potential signal and then failing to trigger it can be as bearish as it would have been bullish. Reacting down today is probably the only way to greet Friday afternoon’s bullish WedEX influence from lower levels.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2753.00 would be unlikely to trigger the 2755.00 bias-up signal at 10:15. Exiting the open above 2757.00 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…
An overnight rally that had far exceeded its bias-up parameters greeted Tuesday’s open at its 2727.75 renewed bias-up target. The rally resumed with little delay, and extended sharply higher to test its next objective at 2743.50 soon after noon. The bias environment’s probe higher up to 2748.00 was retraced to end the day still testing 2743.50.

Overnight action’s new info…
The rally hardly delayed resuming, and suddenly spiked up 10 points to attack 2756.00. Its reaction down was supported by 2751.00 as price eked its way back up through midnight to eventually touch 2757.00. There was complexity, creating a “new Globex trend extreme” that is all but required to be retested intraday. Trending back down into and out of Europe’s opens has pierced 1 point under yesterday’s 2747.75 high as support, reacting up to 2751.00.

If, then… (notes to accompany the Tour recording)
It’s important to note how this current upleg has unfolded: Closing above 2721.00 for its second consecutive session last Tuesday had established that one more higher target was in-play for the bear market rally — 2751.00, with room for noise up to 2757.00. Rather than extend, the rally immediately began retracing, resting on the laurels of a higher attraction to rescue it. Pullback objectives were met down to 2708.00-2709.00 and 2788.00-2690.00, and even exceeded to the next lower support at 2681.00-2682.00 Friday morning before the rally resumed. And it resumed without correction on the way to meeting its 2751.00 and 2757.00 targets overnight. Their Intraday test is preferable, and likely, while holding above yesterday’s range. Reversing back under yesterday’s last relative lows at 2741.50 and 2738.75 would start reversing the trend back down.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2751.00 would be likely to trigger the 2748.75 bias-up signal at 10:15. Exiting the open under 2743.75 would be unlikely 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…
Monday’s gap up to 2714.50 was well off of Sunday night’s 2721.50 high, but still well above the 2700.50 overnight low. Dipping through the opening 15 minutes of volatility settled into a choppy range largely contained between 2705.50-2712.75, and ranging around 2708.00-2709.00, which ultimately contained the close.

Overnight action’s new info…
Already firming soon after the Globex open, news of a budget deal seemed to be drive price sharply higher. Sunday night’s highs were probed by 3 points up to 2724.25 before midnight. Ranging flat-to-lower found support at what is this morning’s 2720.50 bias-up target. The consolidation finally resolved by surging into Europe’s opens, attacking 2727.00. Another correction has recovered to now probe fresh highs probing 2728.00.

If, then… (notes to accompany the Tour recording)
Overnight patterns don’t necessarily guide intraday activity. One example is Sunday night’s highs, which had stopped pessimistically short of touching the consolidation from last Tue-Wed, and its “higher prior lows” at 2723.00-2727.00. Contrarianism would have made that bullish, if the attack had developed intraday. Another example is Monday night’s actual test of those same higher prior lows. Their test intraday would be likely to react down, but gapping up above resistance often extends through it intraday. The question is how today’s opening 15 minutes of volatility negotiates the higher prior lows — and possibly also the gap back to Wednesday’s 2730.00-2731.00 close.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2722.75 would be likely also to exceed the 2720.50 bias-up target at 10:15 to renew the bias-up signal.