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 open had recovered overnight up to 2104.00-2105.00 after dropping 10 points under it. The overnight dip had stopped short of retesting Tuesday’s 2091.00 low as required by its oversold RSIs. The open’s rally attempt only reached 2106.50 before reversing down into and out of the afternoon’s FOMC policy statement. The afternoon’s 2088.00 bias-down target was pierced by 1 tick, taking RSIs oversold again. Its reaction attacked 2100.00, but only briefly as the close trended back down to attack the low.

Overnight action’s new info…
Initially bouncing was resisted upon testing Tuesday night’s 2095.00 support as resistance. Suddenly plunging extended down to 2084.00. The probe under prior lows was a singular leg, so not a “new Globex trend extreme” that would otherwise require intraday retest. RSIs diverged positively on its retest, helping to launch a recovery that has probed more than 6 points into positive territory attacking 2099.00.

If, then…
Did last night’s drop to 2084.00 satisfy the decline targeting 2082.00? Similar to the room it has down to 2077.50, resistance above it begins at 2084.50. Its test last night would qualify. If retested, the objective would target the noise range’s 2077.50 lower-end. In any case, isolating the probe of fresh trend lows to the overnight window — as is currently indicated by having recovered into positive territory — could begin a multi-session momentum reversal back up. Just in time for tomorrow’s Employment Situation report. But anything more than retesting yesterday’s oversold RSIs at its low must be avoided, if not negative territory altogether.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2098.00 would be likely to trigger the 2095.50 bias-up signal at 10:15. Exiting the open above 2104.50 would be likely also to exceed the 2101.25 bias-up target at 10:15 to renew the bias-up signal. Exiting the open under 2091.75 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…
Rejecting the overnight probe above 2124.25-2125.00 was likely to launch a downleg back to the prior low. But Tuesday’s plunge from its 2125.00 open was much more productive than that. The morning’s 2111.26 bias-down target was fulfilled, along with the prior low’s retest objective at 2105.00, and the long outstanding 2095.00 objective. The latter was probed down to support at 2091.00 where a bounce to some degree was likely — it eventually attacked 2109.00. A hold-long was indicated at the close, with a pullback limit of 2104.00. Oversold RSIs were left outstanding at the low, along with the next lower objective at 2182.00.

Overnight action’s new info…
The rally never touched 2109.00, let alone exceeded it. The 2104.00 pullback limit was tested almost immediately. The drop extended relentlessly until touching 2095.00 — and this morning’s 2094.75 bias-down signal. Choppy ranging gradually firmed, and now has surged, testing 2104.00 as resistance

If, then…
Not dipping back under 2104.00 would have enabled Tuesday’s hold-long.to reach 2111.25, then the 2115.00 and 2121.25-2122.00 areas. They could still be met, if today’s open were to reject the overnight probe under 2104.00 as yesterday’s open rejected its overnight probe above 2125.00. Otherwise, the overnight low’s retest down to oversold RSIs at yesterday’s 2091.00 low would be likely. So would an extension down to 2082.00, with room for noise down to 2077.50. Trending or any aggressive move would become more difficult as the afternoon’s FOMC statement nears. Anxiousness ahead of its likely hawkish statement, or in reaction, could be followed by a relief rally for having the event become history..

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2104.00 would be unlikely to trigger the 2100.50 bias-down signal at 10:15. Exiting the open under 2098.00 would be likely to trigger bias-down. Exiting the open above 2111.25 would be likely to trigger the 2109.50 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…
Monday’s session was choppy but only ranged around Friday’s close. It was narrower than the overnight range, which was narrower than Friday’s range.  But there was at least one predictive feature. The morning’s 2120.00 low stopped optimistically short of touching Friday’s lows. And it was retested after an intraday bounce had probed fresh post-open highs. The first bounce is potentially bearish from a contrarian perspective. Returning to the bounce’s origin all but requires at least an obligatory low. It had become too late to attract sponsorship for breaking lower, making another interim bounce likely, first.

Overnight action’s new info…
Last night’s range is wider than Monday’s. The Globex open quickly fulfilled the intraday corrective bounce potential up to 2124.25-2125.00. But there was greater potential for extending the corrective bounce overnight. It was fulfilled by only attacking yesterday’s 2130.50 intraday high to within 1 point. Its reaction down to 2123.25 bounced 4 points, but that bounce is now reacting back down through 2124.25-2125.00.

If, then…
Monday’s relatively narrow range was disappointing. Especially after Friday’s luscious volatility of a failed recovery and its deep drop. But Monday’s multiple fluctuations between positive and negative territory kept volatility alive. And last night’s range was as wide or wider than Monday. Perhaps anxiousness ahead of tomorrow’s somewhat predictable FOMC policy statement has already had a paralyzing effect. Still ranging narrowly through today is a lot of patience to ask of the market. Holding under 2124.25-2125.00 post-open would keep alive the likelihood for a pessimistic dive under Monday’s 2119.00-2120.00 lows, retesting Friday’s 2112.50 low down to 2105.00, and possibly another 10 or 25 points lower. Avoiding any pessimistic dive today would make a bigger bounce likely, and then its failure.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2127.75 would be likely to trigger the 2125.50 bias-up signal at 10:15. Exiting the open under 2124.25 would be unlikely to trigger bias-up. Exiting the open under 2116.00 would be likely to trigger the 2117.75 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…
Friday’s session had recovered from probing fresh lows overnight down to 2116.00. Potential to 2137.50 was attacked to within 5 ticks when the FBI headline triggered a 23-point plunge to fresh lows at 2112.50. Bouncing choppily into the last half-hour attacked 2128.00, retracing 61.8% of the plunge. No “unfinished business” was left outstanding but it was the fourth consecutive lower close and lower intraday lows.

Overnight action’s new info…
Sunday night’s open blipped-down to 2114.75 and bounced quickly into a 2119.00-2122.00 range. An eventual breakout rallied up to 2130.50, 7-8 points back into positive territory. Its retracement has been attacking 2124.00.

If, then…
The origin of Friday afternoon’s plunge was a little premature. But not by much and not at all unexpected — the overnight low’s retracement was likely. The plunge’s 61.8% retracement also tested “higher prior lows” before the close, fulfilling a correction. Bouncing overnight doesn’t preclude launching a new downleg, not this shallow of a bounce, not without also gapping up above Friday afternoon’s highs (currently 11 points higher). Four consecutive lower closes all but require at least an intraday fresh low before any recovery would be credible.

First Trade…
[Click here to view the Bias parameters] Exiting the open under 2127.75 at 9:45 would be unlikely to trigger the 2131.00 bias-up signal at 10:15. Exiting the open above 2121.25 would be unlikely to trigger the 2117.50 bias-down signal. Exiting the open under 2116.75 would be likely to trigger bias-down.

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…
Oversold RSIs accompanied Thursday’s late-afternoon retest of the morning’s oversold RSIs at 2126.75. Another bounce would be doomed to failure, while making more than a retest likely. Firming up to 2129.50 ended the cash session at 2127.75. Reaction to AMZN’s earnings miss triggered a plunge to fresh lows, touching the 2122.50 target as futures closed.

Overnight action’s new info…
Reaction up from the post-close 2122.50 target was immediate and didn’t stop until touching 2129.50. Flat-to-lower ranging broke down sharply at Europe’s opens and slid to 2116.00. Its 6-point bounce was retraced almost entirely. That happened quickly, as has a 12-point rally back above yesterday’s lows which is now testing the 2127.75 cash session close.

If, then…
Wednesday morning’s 2125.00 low had retraced last Friday’s expiration range as deeply as possible without also requiring at least a probe under 2118.00. Isolating Thursday’s post-close dip under 2125.00 could have been dismissed, but overnight action has fulfilled the lower probe, anyway. Opening Friday in positive territory would isolate it, and could avoid the risk of extending down through it intraday. Reversing momentum up this morning could trigger a massive short-squeeze, but barely opening in positive territory probably wouldn’t suffice. Currently bouncing back up to unchanged remains vulnerable to failing already well before the open, and had better extend higher soon to avoid entering the weekend challenging 2095.00 and potentially 2082.00.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2123.25 would be likely also to trigger the 2125.25 bias-down signal at 10:15. Exiting the open above 2127.00 would be unlikely to trigger bias-down.