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 late-afternoon 2112.00 low had pierced Tuesday’s low by a single tick. That was bearish enough to all but ensure lower lows on the horizon, whether immediately or delayed. Delayed. The last half-hour bounced up to 2119.50, almost all of it retraced by spiking down into the futures close. The stopped WedEX from triggering an optimal signal, other than it not rejecting the cumulative chipping away at support. It was a second consecutive close under 2134.00. But a hold-short was narrowly avoided, and overbought RSIs were left outstanding at the morning’s 2134.50 high.

Overnight action’s new info…
Initial firming was jolted abruptly by a 9-point plunge that was triggered by concerns over next week’s BOJ meeting. The fresh low tested “lower prior highs” from Sunday night’s consolidation down to 2108.00. Completely retracing the drop before Europe’s opens, the recovery extended well into positive territory to greet this morning’s BOE policy statement at 2123.25. The immediate reaction has dipped to 2118.00.

If, then…
I have been noting that this month’s WedEX seems capable of both trending and counter-trending, with substantial moves in either direction. Only several hours after triggering WedEX, we’ve already seen an example of each… Now the overnight rally might seem to make gapping down Thursday more difficult. Perhaps a little, but that’s a function of the recovery’s momentum, which has become quite stretched. The open is still the open, and this morning’s econ calendar is busy (5 reports simultaneously at 8:30!)… Testing Monday’s 2110.50 post-open low overnight has created an attraction that would soon be in-play if the open doesn’t immediately recover a dip back into negative territory. Actually gapping down under 2110.50 still would serve by proxy to trigger a Bearish WedEX. Otherwise, gapping up above 2134.00 is the minimum to even suggest a Bullish WedEX. It is meanwhile resistance.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2121.25 would be unlikely to trigger the 2124.25 bias-up signal at 10:15. Exiting the open above 2121.25 would be unlikely to trigger the 2114.25 bias-down signal. Exiting the open above 2127.00 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…
Monday’s single-minded rally to 2156.00 was followed by a single-minded reversal that persisted through Tuesday’s noon hour. Tuesday’s cash session had begun by gapping down to and through the relevant 2134.00 level. Extending down to 2112.25 bottomed suddenly as the 30-year’s auction triggered a 30-minute surge to 2129.50. The balance of the afternoon was choppy and wide, but held within the noon hour’s range, recovering 2126.00 into the close..

Overnight action’s new info…
Firming back up to Tuesday’s 2129.50 high pierced it by 1 tick. Dipping through Europe’s opens quickly bottomed at 2121.25. The range has persisted, and has persisted in avoiding any trending.

If, then…
Yesterday’s lows stopped optimistically short of touching Monday’s 2110.50 post-open low. That’s likely to be only temporary, and its eventual retest would likely slice through Sunday night’s lows to 2095.00. Tuesday’s gap down and close under 2134.00 keeps alive the lower attractions that began forming Friday, still needing confirmation from a second consecutive close. Gapping up above 2134.00 would start enticing buyers to accelerate their entries. Holding yesterday afternoon’s 2129.50 high as resistance keeps the door open to sellers.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2132.00 would be likely to trigger the 2130.50 bias-up signal at 10:15. Exiting the open under 2127.00 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…
Monday’s post-open rally had climbed 44 points into the 2154.00 bias-environment high. Ranging back down to 2150.00. The rally didn’t try resuming until the position-squaring window, which was too late to gain traction. Its surge up to 2156.00 touched some “higher prior lows” and reacted back down entirely to 2150.00 into the close.

Overnight action’s new info…
The late surge’s retracement extended down after the close. Its double-digit decline has been relentless, most recently touching 2135.50. Its reaction up had found resistance at 2139.00, which just blipped-up to touch 2141.50.

If, then…
Extending the overnight slide could greet Tuesday’s open gapping down under Monday afternoon’s 2130.50 low. If the gap down were maintained, the setup would form a “session-long decline.” Gaps down are difficult to maintain when begun by relentless overnight trending, which is vulnerable to counter-trend sponsorship. Otherwise, renewed bias-down still would point down, and still could produce a probe under yesterday’s 2110.50 post-open low, if not also under the 2100.25 overnight low. Having trended down so deeply overnight, today’s only path higher may be to avoid triggering bias-down, at all.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2139.00 would be unlikely to recover the 2141.00 bias-down target through 10:15 and to renew the bias-down signal next targeting 2134.00. Exiting the open under 2144.25 would be likely to trigger the 2147.50 bias-down signal. Exiting the open above 2149.00 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…
Friday’s open gapped down 16 points to 2157.00, and doubled that into the noon hour’s test of 2140.00. Often, such a Friday morning slide would produce a flat-to-higher afternoon. But the selling resumed more aggressively. The cash session close equated to 2120.50, but futures extended down to 2115.50 and 2113.25. August’s 2134.00 prior low was broken on the way down to prices last seen two months earlier in July.

Overnight action’s new info…
Sunday night’s open blipped up momentarily from Friday’s futures close to touch 2117.00, but that was still 3 points under Friday’s cash session close. The drop soon extended down to 2109.00 to await Asia’s opens, which triggered another drop to fresh lows at 2100.25. Bouncing 8 points was retraced entirely through Europe’s opens. Overnight lows are still being attacked.

If, then…
Gapping down is currently indicated above June’s “lower prior highs” (discussed during this weekend’s Saturday Review). Barely. Its representative price can be reduced to 2095.00-2100.00. Gapping down under it is made a little likelier today because Friday’s open gapped under its lower prior high. Regardless of the opening print, recovering through the open from having probed under it could help to launch a morning bounce.Not reacting to lower prior highs could enable today’s drop to make Friday’s drop seem relatively puny. As a reminder, just closing under 2134.00 would confirm a trend change, requiring at least an eventual third lower close. Lon-entries today should be considered only for brief exposure.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2109.00 would be likely to renew the bias-down signal by not recovering the 2110.75 bias-down target through 10:15. The renewed bias-down target would be 2102.00.

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 front-month rolled forward to Dec at Thursday’s open, and it got a lukewarm greeting. Gapping down almost 5 points from Wednesday’s 2179.00 cash session close remained in negative territory throughout the day. The morning probed under the prior session’s low, triggering bias-down. So much for the luke. The balance of the session warmed enough to restrain its pessimism and to avoid trending down. But there was no recovery, and the morning’s 2167.25 bias-down target was left outstanding.

Overnight action’s new info…
Ranging narrower than 2 points hovered just above Thursday’s ~2170.00 lows, until Europe’s opens approached. The range’s break extended down to test and retest 2167.25. Ranging back up to 2169.50 has resolved down to lower lows testing 2165.00..

If, then…
The overnight drop has neutralized the only “unfinished business” left outstanding from Thursday, at 2167.25. Thursday’s “ineffectual pessimism” just got pretty effectual. Potential for isolating the selling to overnight was limited since Wednesday morning’s Pivot Reversal setup had created a bearish context likely to persist into this morning. No traction was gained by Thursday’s drop, so trending Friday morning must begin by gapping under Thursday’s lows. And this being a Friday, the morning’s bias is likely to persist through the noon hour. Any bullish potential depends on rallying through the open.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2170.75 would suggest the 2167.25 bias-down signal will not trigger at 10:15. Exiting the open under 2164.25 would be likely to trigger bias-down.