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…
A third consecutive narrow overnight range greeted Tuesday’s open, which once again resolved in immediate range expansion. Sliding through the morning touched the 2171.50 pullback limit, which was probed by 3 points into the afternoon bias environment’s exit. Although possible, collapsing was avoided by bouncing into the close, back up to the noon hour’s high. But no higher, which would have rejected the afternoon’s probe lower.

Overnight action’s new info…
Fourth time’s a charm? Yesterday’s late afternoon bounce has not extended a single tick. And another range narrower than 4 points has been fluctuating around unchanged.

If, then…
Tuesday afternoon’s low was similar to Friday afternoon’s low also being vulnerable to collapse.. Friday’s late bounce at least probed its noon hour high, and then probed higher overnight, enabling Monday morning’s rally. Last night’s ranging doesn’t reflect such eager buyers. Neither does it reflect eager sellers. Not gapping open either way this morning may leave unanswered whether yesterday’s reaction down has resumed last week’s decline, or if Friday’s bounce is going to extend higher first. But immediate range expansion would suggest at least one or the other will be attempted.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2170.00 would be likely to trigger the 2171.50 bias-down signal at 10:15. Exiting the open above 2177.00 would be unlikely to trigger bias-down. Exiting the open above 2182.00 would be likely to trigger the 2180.50 bias-up signal at 10:15.

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…
After rallying throughout the morning from 2169.00 at Monday’s open, the afternoon was contained by its 2182.00 bias-up signal. Not actually probing it — not stretching the rubber band tightly — avoided a steep reaction back down. But there was a modest reaction which eventually extended down to 2178.25. No traction was gained

Overnight action’s new info…
The downward slope of last night’s shallow 4-point range differs from the prior two narrow overnight sessions that had ranged sideways. Not that much downside was covered after firming to attack 2181.00. Extending yesterday’s late-afternoon slide has tested 2177.00 as support.

If, then…
Resuming Monday morning’s rally requires gapping up Tuesday above Monday’s 2182.00 high. That’s not currently indicated, nor is it being attempted, but it’s not too far away. And the two prior narrow overnight ranges began trending immediately at the open. Extending Monday’s late afternoon reaction down would not be required to probe under Monday’s intraday range. But their retest would be likely to break lower.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2177.00 would be unlikely to trigger this morning’s 2174.25 bias-down signal at 10:15. Exiting the open under 2171.50 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…
A narrow 3-4 point overnight range was deceptively calm. Then Friday morning’s rat-a-tat-tat barrage of headlines from Jackson Hole triggered a first-hour 17-point swing. Its 2186.75 high was reversed back down under three-week old lows, filling a an old gap back at 2160.00 down to 2157.50. Friday ended with a 13-point bounce to 2170.25, a 38.2% retracement of the morning’s high.

Overnight action’s new info…
More so than being narrow, last night’s 5-point range is again relatively calm. Sunday night’s open had dipped briefly down to 2164.50. Its eventual retest is now probing the interim high by 1 point up to 2169.50.

If, then…
Closing at 2168.00 avoided putting into play a lower objective, but closing again under 2177.00 indicates the massive topping pattern is probably rolling over. Extending under 2168.00 would have indicated the massive topping pattern is extending down, and under 2156.50 would target a test of 2141.50. At a minimum. Gapping up Monday above 2188.00 would give the pattern another opportunity to probe fresh highs first. Otherwise, resuming Friday’s mid-day slide today would be difficult without the open already gapping down to or through Friday’s low.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2171.50 would be likely to trigger the 2173.50 bias-down signal at 10:!5. Exiting the open above 2166.00 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…
Thursday’s open gapped down to test Wednesday’s 2168.75 low, and snapped back up to avoid triggering bias-down. Its offsetting test of the 2178.75 bias-up signal became “unfinished business above,” with 2177.00 resistance defining the session’s high. In fact, while 2177.00 was likely to be an obstacle to the rally, its reaction retested the open’s low down to 2167.50. The cash session bounced back up to 2172.00, and futures closed at 2174.25.

Overnight action’s new info…
Thursday’s late bounce firmed slightly to touch 2175.00. Choppy ranging into Europe’s opens held 2172.75.as support while piercing slightly higher to 2176.25. Another dip has returned back down to 2172.75.

If, then…
Following yesterday’s two near-death experiences of probing Wednesday’s low, the overnight quiet may seem reassuring. Rather, its narrow range is like a thug waiting around the corner up ahead, on a deceptively quiet street. That corner is the cash session open, which is where it will either jump out at the market to attempt another break lower, or else shrink away to allow another bounce into the weekend… Not extending down Thursday doesn’t mean the decline has lost any traction or momentum. Closing under 2177.00 kept those elements alive. That should prevent another corrective bounce — if the decline is going to extend eventually, then there isn’t any reason to further delay it today. But whichever direction the morning takes, don’t forget that Friday mornings can be exacerbated by the two days of illiquidity bearing down.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2174.25 would be unlikely to trigger the 2177.00 bias-up signal at 10:15. Exiting the open under 2166.00 would be likely to trigger the 2166.00 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)

SPECIAL NOTE: I will be away from the screens on the afternoons of both Thursday and Friday, this week and next, Thank you for allowing me to be of personal assistance in a family matter.

Through the prior close…
Wednesday’s open immediately resumed Tuesday’s slide under 2185.00, to a late-afternoon low of 2168.75. A last-minute 7-point bounce peaked 1 point short of 2177.00, which had been the decline’s likely objective. Recovering it would have allowed the drop since Tuesday’s open to be considered only a temporary correction on the way to new highs. Closing under 2177.00 instead suggests the massive topping pattern we’ve been monitoring is now rolling over.

Overnight action’s new info…
Relatively narrow sideways ranging continued to hold 1 point under 2177.00 resistance. Sliding into and out of Europe’s opens attacked yesterday’s 2168.75 low to within 1 point at 2169.75. Bouncing back up to 2175.00 has been retraced to within 1 point of 2169.75..

If, then…
Gapping open Thursday back above 2177.00 would not be as relevant as if Wednesday had closed above it already. Rejecting Wednesday’s close under 2177.00 would now require gapping up above the 2180.50-2181.25 area. For starters. Any shallower strength would be likely to resume the decline for a third consecutive session — and probably more aggressively as participants start getting the point. Otherwise, attempting to reject the decline wouldn’t ensure extending back up to new highs, and would remain vulnerable to attempting another downleg anyway.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2170.00 would be likely to trigger the 2171.50 bias-down signal at 10:!5. Exiting the open above 2177.00 would be unlikely to trigger bias-down. Exiting the open above 2180.50 would be likely to trigger the 2178.75 bias-up signal.