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…
Opening flat Wednesday with Tuesday’s cash session close had immediately that intraday trending would be unlikely. Not surprising, since volume was depressed from limited participation for the Jewish holiday. So, after the open quickly dipped several points to attack 2126.00, the balance of the morning recovered into positive territory at 2137.00. Trending higher into and out of the afternoon’s FOMC Minutes touched 2139.50, but there was nothing accumulative about the pattern. The balance of the session trended back down to unchanged under 2132.00.

Overnight action’s new info…
Wednesday’s late-afternoon dip extended through unchanged attack the morning’s low. Bouncing back to 2131.00 soon failed in reaction to bad economic news from China. Sliding more sharply down to 2115.00 has since ranged choppily sideways. Fresh lows probed 2113.50 after Europe’s opens, reacting up to 2122.50, still in the choppy range.

If, then…
A bullish scenario Wednesday would have exploited the low-volume environment and neutralized Tuesday’s oversold RSIs left outstanding from its 2121.75 low. But trending is likelier today than it was yesterday, so testing 2121.75 overnight probed it by another 7-9 points. We already know there’s no bullish reason to have tested 2121.75, so recovering from its retest depends on isolating it by already extending up from it through the open. Otherwise, today could duplicate Tuesday’s gap down and steep, deep follow-through.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2125.25 would be likely to trigger the 2127.75 bias-down signal at 10:15. Exiting the open under 2118.75 would be likely also to exceed the 2121.00 bias-down target through 10:15 to renew the 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 gap down to 2153.00 quickly slid through “lower prior highs,” a gap, and prior lows. That much selling pressure in one fell swoop is unusual enough. More unusual is not to react and retrace, at least correcting the price drop. Instead, the slide extended down sharply and relentlessly through the afternoon’s 2125.25 bias-down target to 2121.75. Bouncing into the cash session close recovered back up to 2131.00, which was the afternoon’s bias-down signal. The futures close extended to within 1 point of the late bounce’s 2136.00 objective. Oversold RSIs were left outstanding at the low.

Overnight action’s new info…
The late bounce eventually extended to touch 2140.75, which is this morning’s bias-up target. Reacting down into and out of Europe’s opens tested 2130.00. Bouncing from there is now testing 2134.00.

If, then…
Selling that lacks any singular, generally accepted cause is difficult to bottom. Tuesday’s eventual bounce was accompanied by news of Russia’s comminique to its diplomats. Was that behind the selling, or was the market just so willing to accept it? Regardless, it doesn’t make the decline bullish. And it doesn’t allow an immediate recovery without retesting yesterday’s low — the most bullish scenario must probe lower intraday before recovering. The most bearish setup would try recovering prematurely. Trending at all today, let alone extending down further, could be hampered by low volume due to the Yom Kippur holiday, when many Jewish participants are away from the market.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2136.00 would be likely to trigger the 2135.00 bias-up signal at 10:15. Exiting the open under 2131.00 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…
Sunday night’s rally into Monday’s gap up at 2158.00 wasn’t done. The open extended to 2163.50. Then it was done. Depressed holiday volume limited new sponsorship for anything more than hovering at the highs. That ended with the renewed bias-up environment, and the balance of the session drifted down to its 2156.50 objective. Surging into the futures close came too late to reverse momentum up. No unfinished business was left outstanding.

Overnight action’s new info…
Firming a couple of more points soon attacked 2161.00. Like Monday’s intraday action, the balance of the night has resumed drifting downward. Hovering around the support of this morning’s 2154.25 bias-down signal was probed momentarily to attack 2152.00, but 2154.25 has attracted price back up to it.

If, then…
Spending the entire session in positive territory yesterday didn’t gain traction for its effort, so resuming the rally to fresh highs this morning depended on gapping up above yesterday’s highs. And that’s not likely without already probing higher overnight. The alternative isn’t necessarily bearish — Sunday night’s rally hasn’t been retraced even after extending yesterday afternoon’s drift overnight, expending a lot of selling pressure without gaining traction for its effort. So, not quickly rejecting the overnight dip would more likely only back-and-fill a little deeper this morning, as opposed to launching another downleg. Quickly rejecting the overnight dip could at least spend the morning rallying back to yesterday’s highs, just not through them.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2157.50 would be unlikely to trigger the 2154.25 bias-down signal at 10:15. Exiting the open under 2151.25 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…
Friday’s opening surge stopped short of testing the pre-open reaction to payrolls, which had touched 2161.50. It even stopped short of filling the gap back to last Friday’s 2160.00 area close. The restrained optimism may be potentially bullish from a contrarian perspective, but not immediately. Potential bullishness didn’t prevent a steep morning dip down to 2146.00, or an afternoon dip down to 2138.00. But at least the second dip was retraced into Friday’s close. More restrained optimism, perhaps, but oversold RSIs were left outstanding at the low.

Overnight action’s new info…
Friday’s recovering up to 2151.25 had reacted down into the close at 2145.50. Sunday night’s open gapped up to test 2153.00. Choppy sideways ranging persisted through Europe’s opens, but eventually started trending to fresh highs at 2157.50.

If, then…
Last week’s intraday — mostly early — rally efforts stopped short of prior highs. If that is ultimately bullish from a contrarian perspective, then its ultimate resolution should begin aggressively. Like this morning’s open gapping up above Friday’s highs, as is currently indicated. Testing last week’s highs but then reversing down through the open would suggest their test had held. And the range’s lower-end would be a likely objective of the failure, with equal opportunity to break.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2157.50 would be likely to exceed the 2156.50 bias-up target at 10:15, which would renew the bias-up signal next targeting 2162.25. Exiting the open above 2153.00 at 9:45 would be likely at least to trigger the 2151.25 bias-up signal at 10:15. Exiting the open under 2148.75 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…
The overnight slide had not been dramatic. But it was persistent, extending through Thursday’s open, and through the morning. A bullish headline crossed at a very opportune moment, as the gap back down to Tuesday’s 2143.50 was being filled to neutralize its attraction. Its sudden and steep reaction was also substantial, surging 10 points to attack 2157.00 into the noon hour. Whether anxiousness ahead of the Employment Situation report made the dramatic reaction possible, that anxiousness is probably responsible for inhibiting the balance of the session. Narrow ranging into the close was followed by a blip-up to 2157.75.

Overnight action’s new info…
Being post-close, the fresh high was irrelevant, and it was retraced into the Globex open. Its retracement extended down to 2149.50 as the British Pound flash-crashed. Price action has otherwise been less of a participant and more of an observer to the fireworks, centering around 2149.50 while ranging choppily between 2148.00-2153.75.

If, then…
Having neutralized the attraction below at the gap down to Tuesday’s 2143.50 close, there’s no bullish reason to retest it. It’s less likely to attract price down, but also less likely to offer support if retested — unless its retest were isolated, like only probing it momentarily in reaction to this morning’s Employment Situation report. Meanwhile, the upside potential remains entirely valid, if not also likely, especially after two-three days of “ineffectual pessimism” at 2156.50 resistance. At least an obligatory probe above it has become increasingly likely.

First Trade…
[Click here to view the Bias parameters] There are no preliminary levels ahead of an Employment Situation report.