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 gap up was its most promising moment, but not the only one. The bias-up target was then exceeded to renew the bias-up signal, but its next higher objective wasn’t met. A couple of blips-up probed fresh highs, but they stopped as quickly as they had started. Other than no trending back down, that wasn’t much reward for inverting the downside traction gained by Tuesday’s decline. It didn’t prevent the last hour’s reaction down from 2158.00 to 2152.00, and it didn’t leave any “unfinished business above.”

Overnight action’s new info…
Extending Wednesday’s late reaction down another point to test 2151.00 was recovered into Europe’s opens to attack 2156.00. But that soon peaked coming out of Europe’s opens, and it eventually reacted down with an even bigger drop testing this morning’s 2147.75 bias-down signal.

If, then…
The aggression of Wednesday’s late drop was relative to the session’s otherwise narrow range.  Despite being steep and deep, the drop didn’t damage the intraday pattern of coiling and pent-up buying pressure. If anything, it fulfilled the template that had been warning a rubber band effect could be needed to stretch price down so that snapping back up could re-launch the rally. But stretching that rubber band so late made it difficult to attract new sponsorship. Still not snapping back up this morning would be likely to gap down, such as last night’s price action is now indicating. Which is still not bearish, and could be an even bigger rubber band stretch — unless gapping down were to maintain a break under Wednesday’s 2149.75 low.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2146.25 would be likely to trigger the 2147.75 bias-down signal at 10:15. Exiting the open above 2150.50 would be unlikely 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…
Gapping up slightly Tuesday held a test of the morning’s 2156.50 bias-up signal. Three times. Each test reacted down to test the 2148.75 bias-down signal, deeper and deeper. The third time was least charming, sliding through the afternoon to 2136.00. And that gained traction, exiting the bias environment under the noon hour’s low, then entering the final hour lower. Only 3-minute RSI was decisively oversold at the low, although 1-minute RSI was on the cusp.

Overnight action’s new info…
Choppy ranging has momentarily pierced positive territory twice, most recently attacking this morning’s 2147.75 bias-up signal to within 2 ticks. But yesterday’s 2143.50 cash session close keeps attracting price back down to it.

If, then…
Potential for retesting last week’s ~2169.00 high, let alone “unfinished business above” at 2175.50, depends on continuing to hold tests of 2138.00-2139.00 support. The problem is that the continued tests are chipping away at support. And now yesterday’s traction is mandating morning trending attempts, which chips away at support further. This is payrolls week, a high-profile report that is reliable for influencing price action as much before as after its release, beginning with today’s pre-open ADP report. “Wreversal Wednesday” would not be unusual in that context. And it may be the only path up, let alone for avoiding a much more bearish picture.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2148.75 would be likely to trigger the 2147.75 bias-up signal at 10:15. Exiting the open under 2142.00 would be unlikely to trigger bias-up. Exiting the open under 2136.75 would be likely to trigger the 2138.00 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 backing-and filling had begun abruptly by gapping down to several points to 2155.00. Extending further down tested relevant support back to Thursday’s ~2147.50 close. The Rosh Hashanah holiday limited the sponsorship available for trending, so support held. Twice. Pessimism was the excuse for two timing windows reacting up shallowly through the close to attack 2156.00 — “ineffectual pessimism.” No unfinished business was left outstanding, and a hold-long setup was not compelling enough.

Overnight action’s new info…
Barely probing higher and higher highs awaited Europe’s opens, which blipped down momentarily to 2153.00. As if that had cleared the air, price soon rallied further to attack 2160.00. Stopping pessimistically short of Friday’s cash session close has reacted down to attack 2153.00.

If, then…
Despite reacting down so deeply from the overnight fresh recovery high, Tuesday’s session remains vulnerable to resuming the recovery, and much more aggressively than was Monday afternoon’s firming. With participation somewhat normalized, probing above Friday’s 2168.00 high would not be an unreasonable reward for unleashing the pent-up buying pressure. All of which relies on post-open action being higher, abruptly and with limited reaction down, if not also by gapping up. Otherwise, probing negative territory — at all, let alone more than momentarily — could at least probe well under Monday’s low, regardless of its ultimate resolution.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2153.25 would be unlikely to trigger the 2156.50 bias-up signal at 10:15. Exiting the open above 2159.00 would be likely 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 gap up to 2153.25 isolated the overnight probe under Thursday’s low down to 2135.75, after the overnight probe had neutralized the required retest of oversold RSIs at Thursday’s low. Friday’s session had trended up through the afternoon proxy window’s 2167.75 high, then pulled back to 2160.00 — into the chase session close, and out of it, extending down to 2156.75. The rally nevertheless gained traction for its effort, having exited the bias environment above the noon hour’s high, and barely entering the final hour at a higher high.

Overnight action’s new info…
Rallying out of Sunday night’s open has pierced Friday morning’s high up to 2164.00. Dipping back down greeted Europe’s opens at 2157.75. Reacting up hasn’t resumed the open’s recovery. But just fluctuating around Friday’s 2160.00 cash session close hasn’t validated Friday’s late drop, let alone extended it.

If, then…
Friday’s late drop originated too late to be predictive. It was also too shallow within 3 minutes of the cash session close to be predictive. It did extend to levels that would have been relevant if printed earlier in the session. Friday’s late drop wasn’t rejected immediately last night, and perhaps not durably. But it wasn’t yet extended, which separates any new price action from the drop, and keeps the door open to that new price action being to resume Friday’s rally.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2153.00 would be likely to trigger the 2155.00 bias-down signal at 10:15. Exiting the open above 2161.00 would be unlikely to trigger bias-down.

0-=-092yujkl]\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 noon hour plunge to 2140.75 had tried extending lower during the afternoon bias environment. But the fresh session extreme at 2137.25 was rejected by the bias environment exiting back above its 2149.25 relative high up to 2153.50. Although this short-squeeze setup often produces a last-hour surge, this time it didn’t. The decline didn’t resume, as dipping back down to 2153.00 — a 61.8% retracement back down to the low — ranged choppily through the final hour. Oversold RSIs were left outstanding at the low.

Overnight action’s new info…
Gradually gravitating back down toward yesterday’s lows was then pushed to fresh lows at 2135.75 as Europe’s opens had their first chance to sympathize with yesterday’s noon hour plunge. Gradually working back up into the overnight range has extended back to unchanged, briefly probing higher to 2149.50.

If, then…
Retesting yesterday afternoon’s oversold RSIs overnight suffices to neutralize their attraction. Now greeting Friday’s open in positive territory can still fulfill yesterday afternoon’s short-squeeze setup, after all. Almost no post-open probe back under yesterday’s low can be tolerated if the morning intends to rally. Also, this being a Friday, the morning’s bias tends to persist through the noon hour. Persistent, and aggressive in whichever direction, especially greeting the week’s last session with a big drop back to relevant support that has already been productive once.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2138.00 would be likely to trigger the 2140.50 bias-down signal at 10:15. Exiting the open above 2143.50 would be unlikely to trigger bias-down.