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 close had recovered from its 2141.50 low back up to Thursday’s 2153.50 low. That was still well under Monday’s 2165.00 close. The requirement to test Thursday’s low was neutralized, and now oversold RSIs at 2141.50 require a retest..

Overnight action’s new info…
Trending down shallowly overnight has nevertheless been relentless. Selling accelerated briefly as Europe’s opens triggered a 6-point slide to 2145.25. That has since firmed to attack 2150.00.

If, then…
Closing at Thursday’s 2153.50 low Tuesday suggests the current downleg is only temporary. Closing above Thursday’s low could have suggested the downleg is done. Instead, a retest of Tuesday’s 2141.50 low is likely, especially if Wednesday’s open doesn’t gap up. Entering the noon hour under Tuesday’s low would suggest a much deeper downleg underway.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2142.50 would be likely to trigger the 2146.75 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…
Sunday night’s “new Globex trend extreme” at the 2177.75 overnight high was left outstanding Monday, and its eventual retest is required. But opening back in Friday’s range and staying thee isolated the overnight highs, so that intraday sentiment could take an opposite tack. The noon hour’s 2160.00 area lows held through the afternoon, as did 2166.00 resistance. No other “unfinished business” was created and no traction was gained.

Overnight action’s new info…
Monday’s closing attack on 2166.00 resistance was soon broken by a rally to 2171.00. Its reaction drifted back down to 2166.00 ahead of Europe’s opens, which triggered a steep drop back down through Monday’s lows to 2157.50. Now a bounce ranging a couple points back above Monday’s lows.

If, then…
The next lower objective would be to retest Thursday’s 2153.50 low, as a consequence to Friday morning’s trending above Thursday’s highs without traction. Despite the overnight slide, not already trending down at Tuesday’s close would make the 2177.75 high’s retest likelier, first. Gapping down under Monday’s 2160.00 lows would likely trend down through the morning. Regardless, nothing can change Monday’s sentiment peak setup, and intraday reaction’s confirmation. The burden of proof is back on buyers.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2166.00 would be unlikely to trigger the 2160.75 bias-down signal at 10:15. Exiting the open under 2158.00 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 flat-to-lower open extended down nearly 7 points to 2156.50 before reversing up. The slingshot extended through Thursday’s highs to attack 2172.00 into the noon hour. The balance of the session ranged choppily sideways, supported by 2166.00. Friday produced fresh highs despite Thursday’s rally not having gained, so its correction was left outstanding. A new trend high close was barely avoided, and no traction was gained.

Overnight action’s new info…
Sunday night started optimistically. The open gapped up to a new high at 2174.00. Reacting down to 2170.00 filled the gap back to Friday’s futures close, stopping 3 points above Friday’s 2167.00 cash session close. Recovering to fresh highs at 2177.50 formed a “new Globex trend extreme” that will require eventual intraday retest. But that didn’t stop trending back down to fresh overnight lows at 2168.50 — still above Friday’s cash session close.

If, then…
Did the music stop? There might be one or two chairs left… This time. Probing fresh highs Monday would be no different than if done Friday afternoon, and remains extra vulnerable to being rejected aggressively. And the consequence is now greater.than if Friday had yet probed high enough to encounter counter-trend sponsorship. That template may be developing already. The requirement to eventually retest last night’s new highs wouldn’t prevent extending down sharply this morning — especially if the probe above Friday’s highs is isolated to the overnight. But holding or recovering positive territory would be attracted back to the overnight highs.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2171.25 would be unlikely to trigger the 2173.50 bias-up signal at 10:15. Exiting the open above 2175.50 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…
Rallying overnight up to 2168.50 didn’t ensure any higher highs, especially since the 2168.00-2169.00 area has an almost daily pattern of rejecting rallies. Thursday opened flat and then fell further down to 2153.50. A 9-point bounce was retraced entirely before the morning ended. But the next bounce extended into the final hour, up to 2167.50. The bias environment was exited above the noon hour’s high, but no other traction was gained..

Overnight action’s new info…
.Reaction to post-close earnings from AMZN and GOOG was isolated to NQs. ES was more inhibited by the coming BOJ policy statement. Flat-to-lower ranging blipped-up to 2168.00 on a fat-fingered Yen trade, and its cover triggered a 10-point spike down to 2157.50. Volatility persisted, albeit narrowing the range centered around 2161.50

If, then…
Greeting Friday’s open at or above 2168.00-2169.00 remains in touch, if not actually in-play. Friday Factors could enable it being the first among 4-5 prior instances in the past week to extend high. Probing Sunday night’s highs up to 2175.50 would still be vulnerable to reversing back down, especially since Thursday’s rally didn’t gain traction. Not gapping up could still probe fresh highs, and would be more vulnerable to failure. The only bearish path must gap down.  We’ll be monitoring for a new trend high close, which has predictive value on Fridays..

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2158.0 would be likely to trigger the 2160.75 bias-down signal at 10:15. Exiting the open above 2168.00 would be unlikely to trigger bias-down. Exiting the open above 2171.25 would be like to trigger the 2169.00 bias-up 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…
Wednesday afternoon’s recovery from the FOMC reaction rallied nearly 15 points to attack 2167.00. That’s after initially plunging from 2160.00 to 2152.00.The selling may seem repudiated, but Wednesday’s close dipped back down to 2160.00. Post-close action attacked 2158.00.

Overnight action’s new info…
Oh, look. Another test of 2168.00-2169.00 has reacted down. Almost all of Wednesday’s late dip was eventually retraced before Europe’s opens. Surging soon after that probed fresh highs up to 2186.50. But, once again, that area has reacted down instead of extending higher. This time 2160.00 is being probed by almost 1 point.

If, then…
The relief rally to FOMC was among its briefest, and had elapsed entirely by yesterday’s close. Left to its own devices, the rally is up to its old tricks. While proximity to the highs keeps alive potential up to 2171.25 up to 2175.50, Opening flat-to-down this morning would be likelier to attract selling than buying. Similarly, rejecting the overnight dip before the open would be more bullish for having trapped another downleg.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2158.00 would be likely to at least test this morning’s 2153.25 bias-down signal. Exiting the open under 2161.50 would be unlikely to trigger the 2167.75 bias-up signal. Exiting the open above 2169.25 would be likely to trigger the 2167.75 bias-up signal