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…
Tuesday’s gap up almost immediately neutralized any “unfinished business above,” essentially from last Monday. The gap back up to last Monday’s 2187.00 close was filled at Tuesday’s open, and last Monday’s 2190.75 high ‘s high was pierced several minutes later. The balance of the session drifted back down, closing at a fresh session low, which was also last Monday’s 2185.00 opening print.

Overnight action’s new info…
Tuesday’s intraday slide eventually resumed, extending to fresh lows at 2180.75 into Europe’s opens. That essentially fills the gap back down to Monday’s close, testing Friday-Monday’s 2182.00-2184.25 “lower prior highs” as support. Price action since then has rallied to attack 2188.00.

If, then…
Tuesday’s session was a breakout above a three-session range. Essentially being contained within last Monday’s range undermines the breakout. Closing today above yesterday’s high might otherwise confirm the breakout, but that would be undermined, too. The rally would still get a benefit of the doubt, having recovered from the overnight dip back down to lower prior highs — more so, if the overnight dip were isolated by not revisiting any part of it post-open. There is otherwise no unfinished business above to prevent launching a credible new downleg at any time.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2184.25 would be unlikely to trigger the 2182.75 bias-down signal at 10:15. Exiting the open under 2180.50 would be likely to trigger bias-down. Exiting the open above 2190.00 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…
The week began with a largely “inside day” contained within Friday’s range (the lone exception being the noon hour’s momentary 2183.50 high, if not counting the 2184.50 overnight high). A remarkable 6-7 intraday swings alternated between up and down, an orderly fashion usually reserved to trending action. Oversold RSIs were left outstanding at the 2175.00 late-morning low. The morning’s 2185.00 bias objective was left outstanding above..

Overnight action’s new info…
Flat-to-higher narrow ranging drifted narrowly into and out of Europe’s opens, and through Monday’s 2183.50 high. Surging an hour later touched 2187.25. Its 3-point reaction down was recovered entirely, briefly extending up to 2188.00.

If, then…
Having gained no traction yesterday, trending this morning requires gapping open beyond yesterday’s range. Overnight action indicates as much, at least at this moment. But overnight action is also hesitating upon filling the gap back up to last Monday’s 2187.00 close. Yesterday’s highs formed upon filling the gap back up to Friday’s close, which illustrates the difficulty in testing resistance intraday. Gapping up to and through 2187.00 would be more reliable for extending higher post-open. The minimum reward would be new highs, at least momentarily. Perhaps at most momentarily, as new highs would be vulnerable to reversing back down aggressively.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2187.00 would be likely to trigger the 2185.00 bias-up signal at 10:15. Exiting the open under 2182.00 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…
Friday morning’s gap down tried extending, more in terms of points than in time. The open contained the 2172.50 bottom, 12 points off of Thursday’s highs. The morning’s bounce to 2181.50 had reacted down to enter Friday afternoon’s bias environment at 2176.50. Trending up to fresh session highs at 2183.00 was entirely consistent with a bullish WedEX. No unfinished business was left outstanding.

Overnight action’s new info…
Europe’s opens once again provided a paradigm shift in overnight price action. Sunday night’s flat open had soon begun sliding, eventually retracing back down to Friday afternoon’s bias environment entry at 2176.50. Blipping-down 1 point deeper at Europe’s opens only stretched the rubber band to snap back up. Thursday’s highs were retested up to 2184.50. That paradigm shift isn’t yet necessarily tectonic — its reaction back down into negative territory is testing 2178.00

If, then…
This weekend’s Saturday Review described the potential for retesting last week’s 2188.50-2190.50 highs, before a durable downleg could begin. Last night’s choppy overnight range requires opinions to be pressed, and defended. Recovering the overnight dip and reversing to probe Friday’s highs suggests buyers are percolating. Friday’s bullish WedEX performance enhances this morning’s opportunity to push price higher, regardless of the afternoon’s resolution. Gapping down under Friday afternoon’s 2175.75 low may be the only way to start trending down this morning.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2180.50 would be unlikely to trigger the 2176.00 bias-down signal at 10:15. Exiting the open under 2174.25 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…
Thursday afternoon’s rally gained no traction for its effort, such as it was.bullish. Closing action retested the morning’s 2184.25 peak, recovering from the noon hour’s 2178.00 oversold low. This was after the session avoided backing-and-filling when its prior session had not gained traction either. No unfinished business was left outstanding.

Overnight action’s new info…
Flat-to-slightly lower ranging touched 2181.25 before bouncing to within 2-3 ticks of Thursdays close. That coincided with Europe’s opens, which triggered a steep, deep plunge attacking 2175.00. Its reaction up to 2179.50 has been retraced almost entirely back to the plunge’s low.

If, then…
This afternoon’s Bullish WedEX influence should start becoming evident after the noon hour. That’s going to be difficult if that same window is not yet allowed to rally, which it won’t be. Yesterday afternoon’s rally didn’t gain traction for its effort, so not gapping up makes rallying unlikely until the final 60-90 minutes. And the open is certainly not indicated to gap up… Meanwhile, gapping down under yesterday afternoon’s low after having trended up into the close is going to form a “session-long decline” setup. This instance is based on very small measurements, and its size does matter, so I’m not letting it override indications by other setups.

I would suggest giving sellers every benefit of the doubt for the morning if the open trends down. I’ll give sellers every benefit of the doubt this afternoon if the morning trends down. And Monday could be very ugly if the session trends down. Avoiding bias-down is critical to resuming the rally at all.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2174.25 would be likely to trigger the 2177.00 bias-down signal at 10P:15. Exiting the open above 2179.50 would be unlikely to trigger the 2177.00 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…
Higher and higher highs into and out of Wednesday’s FOMC Minutes were accompanied by overbought RSIs, requiring interim reactions down to recover. Which they did. RSIs didn’t get overbought at the last high’s 2179.75 peak, but that didn’t stop its retest from extending to 2181.00 into the close. Oversold RSIs were left outstanding at Wednesday’s 2165.50 low. Ironically, that low had probed the rally’s last relative low, so its recovery triggered a passively bullish WedEX

Overnight action’s new info…
Wednesday’s closing strength extended momentarily to touch 2182.00, and then began a dip back down to 2178.75. Recovering only probed fresh highs by 2-3 ticks before reversing back down to 2178.75, which is still being tested now.

If, then…
Invalidating the bullish WedEX would require gapping down Thursday under Wednesday afternoon’s 2169.25 low, or lower (which would also form a “session-long decline” setup). That’s not currently indicated, but neither yesterday’s recovery extending. Deteriorating RSIs into Wednesday’s last high opened the door to an overnight pullback. Avoiding that doesn’t shut the door to a pullback intraday Thursday. Having failed to gain traction Wednesday afternoon, the rally is unlikely to extend this morning anyway — not without maintaining a gap up.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2178.00 would be unlikely to trigger the 2182.50 bias-up signal at 10:15. Exiting the open above 2183.50 would be likely to trigger bias-up.