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…
Ultimately trending down through July 4 greeted the holiday-shortened week gapping down 4-1/2 points under 2089.75. Its recovery through Friday’s close had created a requirement for eventually probing prior highs. Fresh lows into the afternoon attacked 2072.00, leaving no “unfinished business below,” but not forming a solid base. Bouncing into the close was unlikely to be maintained.

Overnight action’s new info…
Attacking 2085.00 resistance was reversed back down to probe well under Tuesday’s lows. A recovery began before midnight from 2067.50, probing a fresh high at 2085.75 through Europe’s opens. That sizable rally was rejected, dropping entirely back down to fresh lows at 2066.75. And now that sizable drop is reacting back up, at least to 2072.50.

If, then…
The most bullish scenario described during yesterday’s Wrap was to greet this morning’s open already in recovery mode from an overnight retest of yesterday’s lows. Price action through Europe’s opens seemed to be on that path, having reversed back up through yesterday’s close. Rejecting the entire overnight recovery could still try, try again. But triggering bias-down, even without renewing it under the target, could extend next to 2055.00-2056.50.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2069.25 would be likely also to exceed the 2071.00 bias-down target through 10:15 to renew the bias-down signal. Exiting the open above 2077.75 would be unlikely to trigger the 2076.00 bias-down 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…
Despite Thursday’s rally attacking 2089.75, Friday morning’s surge attacking 2101.00 wasn’t destined to extend relentlessly intraday — regardless of the bullish implications to recovering 2089.75, and despite the prior three intradays pattern. Friday Factors.make afternoon trending less likely. But while they inhibited extending higher, Friday Factors also prevented the intraday pullback from actually reversing the trend back down into the weekend.

Overnight action’s new info…
Sunday night’s holiday price action first probed above last week’s highs to attack 2105.00. That was retraced to attack 2095.00.Monday night’s Globex action never really restarted Sunday night’s rally effort. Soon a different direction emerged — sliding to 2090.00 was consolidated shallowly, and then resolved down to 2082.00..

If, then…
2082.00 hasn’t printed since Thursday’s noon hour. Tuesday’s post-open action is vulnerable to extending the overnight slide. In fact, we discussed the potential for correcting down immediately, which could next target 2076.00 or 2071.00. None of which changes whether 2089.75 was recovered, and whether that recovery requires probing fresh highs up to 2125.25.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2082.50 would be likely also not to recover the 2085.00 bias-down target through 10:15, which would renew the bias-down signal. Exiting the open above 2093.75 would be unlikely to trigger the 2090.00 bias-down 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…
Lacking a single-minded relentless overnight rally didn’t deter Thursday’s intraday action from once again rallying sharply to fresh recovery highs. The open’s gap up to 2068.00 first reacted down 7 points to fill the gap back to Wednesday’s 2062.00 cash session close. Then the balance of the day resumed the rally. The last 60-90 minutes consolidated pessimistically short of touching last Thursday’s 2089.75 “higher prior lows.”.

Overnight action’s new info…
Uncharacteristically narrow ranging developed mostly between 2085.00-2088.00. Dipping through Europe’s opens down to 2081.50 was recovered back into the earlier range, and now the range’s upper-end is being probed by fresh highs attacking 2090.00.

If, then…
Is it only a correction, or a recovery back to week’s highs? “The latter, madam, if you can keep it.” The maximum corrective rally had room up to last Thursday’s 2089.75 higher prior lows, or else last Thursday’s 2119.50 post-close highs would become targeted up to 2125.25. Stopping pessimistically short of the resistance yesterday afternoon is potentially bullish from a contrarian perspective. Even the most bullish resolution doesn’t preclude a temporary detour back down, like to 2071.00, whether from only attacking 2089.75 or after probing above it intraday. A more serious reversal down should have greeted today’s open already in decline, which doesn’t seem likely now.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2091.00 would be likely also to trigger the 2092.50 bias-up signal at 10:15. Exiting the open under 2084.25 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…
Wednesday’s open was greeted by another single-minded relentless overnight rally from 2027.00 to 2044.00. Its resolution had to differ from the prior day, so it gapped up and trended up through every timing window. The bias environment exit and final hour entry each were overlapping their prior timing window highs. Extending to fresh highs at 2064.50 through the 3:10-3:20 timing window was the cash session high. The futures close firmed to fresh highs at 2067.00.

Overnight action’s new info…
As if the relentless rally couldn’t get any more odd, post-close buyback announcements by a bevy of big banks triggered a surge that attacked 2075.00 — all during maintenance. Globex re-opened at 2072.00-2073.00 and trended down to 2056.50 through Europe’s opens. Rallying since then has retraced back up to fresh highs. At least, probing the open up to 2073.75, while the maintenance high lies 1 point higher.

If, then…
Wednesday’s rally came within 3 ticks of Friday morning’s post-open bounce high at 2064.75. That’s natural resistance. That’s also a 61.8% retracement of the drop from Thursday’s 2019.50 post-close high. Which is also natural resistance. These independent resistance levels can be probed intraday to any degree — like 2077.00 — but closing negative would confirm this rally has been only a temporary corrective bounce, perhaps the product of quarter-end window dressing, and that it has ended. And that would confirm Friday and Monday’s trend change signal. Regardless, the rally is vulnerable to at least a corrective dip, as it has been since Monday’s close..

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2061.25 would be unlikely to trigger the 2065.00 bias-up signal at 10:15. Exiting the open above 2067.00 would be likely to trigger bias-up. Exiting the open above 2075.00 would be likely also to exceed the 2071.00 bias-up target at 10:15 to renew the bias-up signal next targeting 2077.00.

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…
Extending Monday night’s single-minded relentless rally higher became likely by not yet attempting to reject halfway through Tuesday’s opening 15 minutes of volatility, Its correction never reversed the trend back down, opening the door to another upleg when the afternoon bias environment began lapsing.

Overnight action’s new info…
Except for dipping initially to 2022.75, another single-minded relentless rally has developed overnight. Most recently, a surge up to 2043.25 tested the resistance of Friday afternoon’s last relative high. The surge is now being retraced back down to its 2038.00 origin.

If, then…
London’s FTSE has retraced almost all of its Brexit drop. The gap back to Thursday’s close may not yet be filled, but the session’s “higher prior lows” have been tested. Its natural resistance coincides with peak liquidity, when strong hands position for the weekend’s illiquidity — which has more relevance ahead of the three-day US holiday weekend. Catalysts for at least attempting another downleg are growing, which is to say that more and more bearish catalysts have been ignored since Monday’s low.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2039.50 would be likely also to exceed the 2041.25 bias-up target through 10:15 to renew the bias-up signal. Exiting the open above 2032.00 would be likely to trigger the 2034.75 bias-up signal at 10:15. Exiting the open under 2031.50 would be unlikely to trigger bias-down.