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…
Wednesday’s close above the 2215.00 objective (basis Mar, 2220.00 basis Dec) was not rejected Thursday. The afternoon bias environment’s 2246.00 high stopped short of the next higher objective at 2147.25. Its reaction down originated too late to seriously threaten closing under the morning’s 2231.50 low, and anyway held a test of 2237.00. The close bounced 6 points up to 2243.00.

Overnight action’s new info…
A third consecutive relatively narrow overnight range? Firming only a couple of ticks up to 2243.50 was eventually retraced down to 2239.75 ahead of Europe’s opens. Congestion there has now bounced back up to 2243.50, essentially unchanged from yesterday’s close.

If, then…
Exiting any timing window above 2147.25 would target 2257.50, and either could be satisfied intraday. There is otherwise no “unfinished business above,” certainly not any requirement for a higher close. That’s especially interesting today, since rallies can entrench themselves by closing at new trend extremes on Fridays. So, while a new high close today would be bullish, not exploiting the proximity would be bearish — especially if either 2147.25 or 2257.50 were tested intraday before closing negative. That’s generally the only bearish scenario, other than temporary dips. Gapping down would not qualify for launching more than a temporary pullback, perhaps even limited to the open before recovering to retest yesterday’s highs..

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2244.25 would be likely to trigger the 2242.50 bias-up signal at 10:15. Exiting the open under 2238.25 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…
Wednesday’s rally was literally awesome. Its 2210.25 buy signal was likely to reach the 2220.00 objective put into play two weeks prior by closing above 2192.00. It was met coming out of the noon hour, but the rally hardly skipped a beat. The afternoon’s bias-up signal was renewed, and extended even higher to 2241.25. Yet, no traction was gained for the effort, despite the 3:10-3:20 proxy window temporarily probing fresh highs.

Overnight action’s new info…
Never seeming concerned with the next day’s ECB events, Wednesday’s rally left nothing on the table for Globex. Two late afternoon tests of 2240.00 each had reacted down to 2236.00. The second reaction extended only slightly lower into the Globex open to pierce 2235.00. Firming up to 2240.00 has reacted back down to 2235.00. Price is fluctuating around unchanged as this morning’s ECB policy decision nears.

If, then…
Closing above 2220.00 puts into play higher objectives, if the close above 2220.00 can be maintained for a second consecutive session today. The next higher objective at 2244.75 was attacked already so closely, that its room for noise up to 2252.50 would be as likely to be met. Closing back under 2220.00 Thursday would negate the higher objective, and open the door to an almost equally steep reversal down into next week — no matter how deeply price had reversed already Thursday.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2241.25 would be likely to trigger the 2240.00 bias-up signal at 10:15. Exiting the open under 2238.00 would be unlikely to trigger bias-up. Exiting the open under 2231.00 would be likely to trigger the 2232.25 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 intraday rally came expectedly, but not as expected. Despite being indicated to gap up as high as 1 tick above Monday’s high 2208.75 high, the 2206.25 opening print was back under Monday morning’s highs. That pre-open slump quickly extended down to attack Monday’s lows to within 2 points at 2100.00. But then the balance of the session did rally, not surging, relentlessly through multiple timing windows, to new highs at 2212.00. Last week’s pullback was confirmed to be only temporary, and the 2110.25 anchor from last Wednesday’s open — which had all but required being tested — is neutralized. Traction was gained during the afternoon.

Overnight action’s new info…
Flat-to-higher ranging has been relatively narrow. At one point dipping to 2208.50, and eventually recovering to probe Tuesday’s highs, a new high print at 2213.00 seems almost accidental. That happens to be this morning’s bias-up signal calculation, derived from yesterday’s intraday patterns. In any case, the fresh high hasn’t attracted new sponsorship. Its quick reaction back down into the range has been holding 2210.00 as support.

If, then…
This isn’t the first time that only one piece of “unfinished business above” was outstanding. It was the same piece, the next higher objective at 2222.00 which was put into play by closing above 2192.00 two weeks ago. That’s how last Wednesday’s session was greeted, and it resolved poorly. Gapping up formed an anchor that yesterday finally retested, one week and a 64-point round trip later. Traction gained by yesterday afternoon’s rally suggests the morning will trend up, too, regardless of gapping up or down. The setup can be inverted by gapping down under yesterday’s 2204.50 noon hour low, but I would still be suspicious if the 2206.00 afternoon bias environment low were broken. Otherwise, 2220.00 is in-play until proved differently.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2215.50 would be likely to trigger the 2213.00 bias-up signal at 10:15. Exiting the open under 2209.00 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…
Gapping down Sunday night to fresh lows had met the correction’s next lower objective at 2181.00. An overnight surge attacking 2206.00 had itself corrected deep enough for Monday’s opening 10-point surge to quickly attack 2209.00. That was the end of Monday’s surges. It was the end of Monday’s rally, altogether. Retracing back down to attack the open’s lows around 2199.00 was quickly recovered up to a 2203.50 buy signal. But it was the opposite of an inflection point, testing it for 45 minutes within a narrow 5-tick range, finally blipping-up to 2206.00 after the close.

Overnight action’s new info…
Monday afternoon’s late lack of momentum undermined the momentum of bouncing off of session lows. The late blip-up to 2206.00 was not extended. Narrow ranging finally dipped at Europe’s opens, but only to attack 2200.00. That got nowhere — nowhere new — and now 2206.00 is being retested.

If, then…
The likely resolution to Sunday night’s surge remains higher. More so for not reversing Monday’s post-open extension intraday. And now all the more so for not reversing it overnight. But the sequence at this stage requires at least another higher high to maintain its uptrending characteristic. And that’s just to maintain the trending. The optimal version of a higher at this stage would resume the rally — not as another surge that expends near-term energy, but as a seemingly relentless push higher. The objective is to probe new highs above the anchor at last week’s high, presumably including the outstanding 2220.00 objective, regardless of how much or how little delay there is before then reversing back down. The overnight fluctuation isn’t choppy enough to rely on any new trending this morning. And while reversing down would still be likely to recover, that could be from sharply lower levels around 2181.00.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2209.00 would be likely to trigger the 2207.75 bias-up signal at 10:15. Exiting the open under 2203.50 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 session tracked its likely scenario by rallying in the morning and then dropping into the afternoon. The morning’s 2197.00 bias-up signal neatly defined the window’s upper-end, and dipping back under 2192.00 signaled momentum reversing down. But 2187.50 held a couple of tests during the afternoon bias environment while RSIs diverged positively, instead of extending down to the 2181.00 target. The balance of the session retraced to the 2192.00 sell signal. But only retraced it.

Overnight action’s new info…
Sunday’s open was greeted by an important referendum in Italy having lost, presumably placing Italy’s banks in jeopardy. The open gapped down to test and retest 2181.00 down to 2179.00. Its reaction probed Friday’s lows up to 2189.00 and then corrected down to 2182.00. Europe’s opens were greeted by a steep surge already testing 2196.00, and extended to attack 2206.00. Now a dip is testing and retesting 2299.00.

If, then…
I posed this question about Sunday night’s gap down when opening the chaRTroom last night: “Is that the end of what was likely to be only a brief pullback before probing fresh highs?” Up 27 points off the overnight low, still I only suspect the answer is yes. One concern about this recovery is the timing of its origin — already surging into Europe’s opens prevented a sympathetic knee-jerk reaction to mirror the Globex open. It suggests the recovery is premature and sponsored by weak hands. Regardless, the overnight low need not be revisited, but last Wednesday’s 2210.25 open all but requires a retest, and the rally has an even higher unmet objective above at 2220.00. None of which prevents post-open backing-and-filling if the overnight short-squeeze isn’t quickly resumed.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2203.50 would be likely to recover the 2200.75 bias-up target through 10:15 to renew the bias-up signal, next targeting 2207.75. Exiting the open above 2197.50 would be likely at least to trigger bias-up.