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…
Thursday’s open was greeted just under Wednesday’s 2260.50 low. That extended down to 2251.50 through the morning. The afternoon bounced to 2259.00 through the close. No oversold RSIs below or no-bias trending above were left outstanding.

Overnight action’s new info…
Consolidating initially back down to 2257.50 eventually resumed trending higher, touching 2261.00 at Europe’s opens. A quick reaction down to 2258.50 has since held for several hours, hovering just above yesterday’s highs.

If, then…
Thursday afternoon’s 2253.00 low had touched the “lower prior high” of a shallow consolidation at the morning’s low. That’s only an obligatory low until its reaction recovers the relevant prior high. Intraday, that prior high was 2258.00. Now the relevant prior high is 2260.50-2262.00, which was tested overnight up to 2261.00. It’s recovery through the open would target Tuesday’s 2269.50 high, and not immediately recovering 2258.00 would target fresh lows at 2249.50, inhibited only by the low-volume context of pre-holiday trading. Trending is difficult to start, difficult to stop once started, and difficult to reverse when participation is evaporating at an exponential pace because of the impending three days of illiquidity.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2260.50 would be likely to trigger the 2259.00 bias-up signal at 10:15. Exiting the open under 2257.50 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…
You thought Tuesday’s back-and-forth was interminable? Wednesday’s narrow ranging was insufferable. The open’s surge to 2268.00 was reversed quickly down to the pattern’s 2264.00 sell signal, which then defined the session’s lower-end. Its vulnerability was to the downside and to test 2260.50. Finally breaking lower upon coming to within 3 minutes of the cash session close did fulfill the test down to 2259.75 after the close. The drop neutralized lower attractions at Tuesday’s oversold RSIs from 2262.25 and the gap back to Monday’s 2260.00 futures close.

Overnight action’s new info…
Only the context of weak-handed sponsorship prohibited considering a hold-short. It was otherwise compelling, despite having fulfilled the 2260.50 downside objective. More relevant is the timing, and the lack of time to react off the target instead of closing at it. This often extends the leg, and it did last night, dipping as deeply as 2255.50. But bouncing since midnight eventually touched 2260.50, which is now trying to hold its reaction down to 2257.50.

If, then…
Probing overnight beyond yesterday’s intraday range should be either maintained or else rejected. In either case, actual trending this morning is likely. Maybe only this morning, if probably only this morning, considering the challenge posed by evaporating volume. Opening within yesterday’s range — and preferably above 2262.00 — could isolate the probe under it to the overnight. Alternatively, testing the 2257.50 bias-down signal would either hold and react up, or else break and trend down. The upside reward is to probe new highs above 2273.00. The downside reward could be 2249.50 and lower..

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2262.00 would be unlikely to trigger the 2264.00 bias-up signal at 10:15. Exiting the open above 2260.50 would be unlikely to trigger the 2257.50 bias-down 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…
Tuesday’s open was greeted by an overnight rally up to its 2267.50 bias-up target. Gapping up and extending higher immediately post-open quickly peaked at 2269.50 as sponsorship disappeared. The balance of the session chopped widely, flat-to-lower, in search of new sponsorship. A late dip from 2267.50 to 2262.25 was retraced entirely into the close, leaving “unfinished business below” at its oversold RSIs.

Overnight action’s new info…
But for initially piercing 2267.50 by a single tick, overnight action has probed no higher than Tuesday’s late bounce while ranging narrowly down to 2265.50. That late bounce had retraced back to the origin of a late dip, so the dip was free to repeat, but it did not. At least, not yet. The narrow ranging had been probed momentarily down to 2264.25, which is now being retested.

If, then…
Gapping up today above yesterday’s 2269.50 high could prevent a deeper, by resuming the rally targeting new highs above 2273.00. A deeper dip could also be prevented by.. not dipping, Alternatively, dipping under Tuesday’s 2262.25 low would have a brief opportunity to snap back up from as low as 2260.50. Regardless, this being Wednesday morning ahead of a three-day holiday weekend, inserting a deeper pullback prior to probing new highs should be underway by the open.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2266.00 would be unlikely to trigger the 2268.50 bias-up signal at 10:15. Exiting the open under 2262.00 would be likely to trigger the 2263.00 bias-down 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…
Monday’s overnight rally to 2261.00 had been largely retraced before the open, and then fully retraced to Friday’s 2254.00 cash session close right after the open. That’s a lot of selling pressure to expend without yet even turning negative. In fact, it was all available selling pressure. Bullish WedEX’s influence exploited the vacuum and launched a surge back to the overnight high. Then another surge probed higher to attack 2264.00. A pullback into noon was largely recovered throughout the afternoon bias environment. The recovery seemed poised and even intent to resume the morning’s rally, when headlines triggered a complete retracement back to the morning’s low.

Overnight action’s new info…
Already bouncing through 2259.00-2260.00 through the cash session and futures close, Globex immediately firmed further to 2262.00. A narrow 2-point range broke higher at Europe’s opens, soon blipping-up to attack 2265.00. Its reaction down to 2262.00 has recovered to now probe higher up to 2265.50.

If, then…
The rally’s excuse for delay Friday afternoon was the president’s press conference stealing focus. Its excuse Monday afternoon was headlines of terrorist actions around the globe. The validity of either of these conditions is irrelevant, so long as this is true — Much has been thrown at this market since last Tuesday’s 2273.00 high, and yet it is repeatedly attacked to 5-9 points. This price proximity alone is enough to be confident in the high’s retest. That’s only helped by Tuesday’s proximity to the weekend holiday’s seasonal bullishness. Not already rallying at Tuesday’s open would have been vulnerable to at least attempting a deep corrective dip. But the open is indicated to at least test yesterday’s highs, if not also surge higher. A post-open reaction down may be the only path lower before next week.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2264.00 would be likely to trigger the 2262.00 bias-up signal at 10:15. Exiting the open under 2259.00 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 quadruple witch expiration open gapped up to only attack the 2264.00 overnight high, which was also the morning’s bias-up signal. Price almost immediately began trending down, extending to test 2250.00 as support coming out of the noon hour. The decline stopped there, as the bullish WedEX would begin influencing price at the bias environment’s entry. Although no new low printed, bounces up to 2255.00 never actually reversed the trend up as a president’s press conference grabbed attention.

Overnight action’s new info…
Opening flat with Friday’s 2255.00 close lasted only several seconds before surging to 2259.50. The surge lasted only several seconds before it stopped, suddenly. And durably. Choppy sideways ranging since the open’s surge has been relatively narrow, contained between 2257.00-2261.00. The lower-end is now being retested.

If, then…
The open’s surge suggests that Friday’s ranging at session lows was actually pent-up buying pressure. That would comport with the assumption that bullish WedEX was inhibited by coinciding with the president’s press conference. That doesn’t assure gapping up, or avoid gapping down, And only the opening action can offer any further assurance of the bullish WedEX influencing this morning’s action. If it does, then price should trend up, possibly aggressively. Not already rallying obviously past the open could suggest no bullish influence, and open the door to resolving “unfinished business below” at 2243.00.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2261.50 would be likely to trigger the 2260.50 bias-up signal at 10:15. Exiting the open under 2257.50 would be unlikely to trigger bias-up.