The First Trade
The First Trade… There’s that bounce.
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 had gapped down to 2014.00 and Monday’s open was even lower at 2011.00. Thursday night’s limit-down at 1999.00 was soon tested on the way down to 1981.50, taking RSIs oversold. A 15-point bounce was retraced to retest the low’s oversold RSIs, neutralizing the attraction below. Meanwhile, sellers didn’t gain traction for the effort.
Overnight action’s new info…
Bouncing at the Globex open extended back up to and through Monday afternoon’s 1996.50 high, and higher to 2006.00. It’s consolidation down to 2000.00 resolved up momentarily to 2008.75, still fluctuating choppily around 2006.00.
If, then…
Yesterday afternoon’s bias-up held instead of triggering, so potential up to 2003.50 was never tested. The retest of yesterday’s 2001.50 low has been more successful, probing the target overnight by up to 5 points. Regardless of its timing or overlap, that was always likely to be only a temporary corrective leg. Friday’s trend change signal was confirmed Monday, so a corrective bounce is not unusual before at least one more lower close fulfills the signal’s minimum requirement. Retesting yesterday’s low remains likely, whether to start forming a more durable bottom, or on the way toward oblivion. Gapping up will create a gap back down to yesterday’s close needing to be filled eventually. And trending up relentlessly overnight is vulnerable to being reversed at the open.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2006.75 would be likely also to exceed the 2003.50 bias-up target at 10:15 to renew the bias-up signal. Exiting the open above 2001.50 would be likely to trigger the 1997.25 bias-up signal at 10:15.
The First Trade… Round-two.
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…
Understatement of the decade: Friday’s open gapped down sharply. But its 2031.50 opening print was well above the overnight limit-down at 1999.00. Rallying through the first half-hour attacked 2065.00, then the balance of the session trended back down. The final hour’s blip-down under the open’s low to 2022.25 reacted up stunningly to 2040.00. Even more stunningly, the cash session’s last 10 minutes were reversed down to 2026.50, extending to fresh lows at 2016.25.
Overnight action’s new info…
Sunday night’s open gapped down to 2014.00 and slide further to 2001.50. Flat-to-higher ignored China devaluing the Yuan again, soon firming back up to the opening print. And then through it, overlapping Friday afternoon’s cash session low by 2 points. Firming through Europe’s opens touched 2022.50 and has reversed down since then, now testing 2005.00 .
If, then…
Thursday night’s 1999.00 limit-down halt requires a retest, probably down to 1993.50, with further potential down to 1980.00. There’s not much time available to isolate the fresh lows by satisfying the retest and already recovering into positive territory pre-open. Not isolating fresh lows would be trickier to form a trading low this morning, with a negative close today confirming a trend change.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2004.50 would be likely also to exceed the 2008.00 bias-down target at 10:15, renewing the bias-down signal. Exiting the open under 2013.25 would be likely at least to trigger the 2018.75 bias-down signal.
The First Trade… That’s going to leave a mark.
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…
Sharply higher overnight highs at 2102.00 were retraced through Thursday’s open down to 2089.75. That was the morning’s bias-up target, and touching it as support launched an up leg that fulfilled its 2099.50 target. Shallow ranging through the afternoon waited until the last half-hour before resolving up from 2098.00, rallying sharply again to fulfill its 2106.00 target. No traction was gained for the effort.
Overnight action’s new info…
Thursday’s late surge wasted no time extending even higher, already extending to 2113.25 before the Globex open, and just as quickly extending to 2119.50 after it. And that was the end of that. Results began arriving, quite different from the intraday and post-close optimism — a narrow win for Remain that should have been wide, a win for Brexit that was wider than anticipated. The first drop was technical, bouncing from 2104.50. The next drop plunged to Thursday morning’s 2089.75 low. One more plunge touched 2050.00. Its 40-point bounce back up to 2089.75 was reversed entirely, too, and kept reversing. Last week’s ~2041.00 low was ignored on the way down to 2025.00, and then to limit-down at 1999.00. Now a bounce up to 2043.50 has retraced 61.8% down to 2016.00.
If, then…
Long night. In some ways, it has seemed like a reunion. The above overnight re-cap lists so many levels that were so pivotal during the rally that is now being retraced. So, is this a correction? There’s no “unfinished business above,” since 2115.00 was met, by a singular non-complex probe which doesn’t qualify as a “new Globex trend extreme.” Is the trend reversing down into a bear market? Duplicating last night intraday would not be recovered for a very long time, and Friday Factors could facilitate that move. Remember that gapping from one end of a range to the other tends to react instead of extending, so this may be only the lower-end of a trading range. That principle certainly will be put to a test today, as the range’s lower-end is being approached at 1993.50, with potential to 1980.00. Bouncing first to 1950.50-1955.50 would be too much optimism, too soon to be sustained..
First Trade…
[Click here to view the Bias parameters] No preliminary levels apply (the understatement of the year)..
The First Trade… Remain seems to be leading.
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…
Janet, who? Gapping up and absorbing a negligible reaction to Yellen still failed to trigger Wednesday morning’s bias-up signal. No-bias trending above it attacked Monday morning’s 2092.50 high to within 6 ticks… 
Remain, what? An anti-Brexit poll reversed that effort, eventually probing negative territory and triggering the afternoon’s bias-down signal. Sellers gained no traction while afternoon ranging probed fresh lows at 2075.25. “Unfinished business below” was left outstanding at 2073.75, adding to 2070.75 from Tuesday.
Overnight action’s new info…
Wednesday evening’s Globex open gapped up to 2083.00 and spiked up to attack 2090.00. Ranging sideways was essentially defined by this morning’s 2084.25 and 2089.75 bias-up signal and its target. Testing the range’s lower-end through Europe’s opens was recovered to the range’s upper-end. Then a break higher surged to and through 2091.00-2092.50 prior highs to 2102.00. Its reaction down to 2095.50 is now trying to recover.
If, then…
Probing Monday’s 2092.50 high was kept alive by multiple attacks on it that repeatedly stopped pessimistically short of actually touching prior interim highs. This behavior was potentially bullish from a contrarian perspective. Testing the unfinished business below at 2073.75 and 2070.75 overnight would have been vulnerable to greeting this morning’s open already recovered back in positive territory. Now that shoe is on the other foot, already neutralizing the attraction above. The optimism hasn’t yet reached proportions that would make it potentially bearish from a contrarian perspective. Two-week old highs could be probed by 5 points up to 2114.75, first.
First Trade…
[Click here to view the Bias parameters] This morning’s bias parameters are far below. Exiting the open at 9:45 above 2100.75 would be likely to maintain the upward momentum. Exiting the open under 2095.25 would be likelier to dip back into the earlier ranging.
The First Trade… Pins and needles.
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 “inside day” opened at 2079.50, well below its 2086.00 overnight high. Extending down into and out of Yellen’s remarks soon found support upon filling the gap back to Monday’s close down to 2074.00. Rallying through the afternoon bias environment’s exit peaked within 1 tick of 2086.00, reacting back down to 2079.50. Unfinished business below was left outstanding at 2070.75.
Overnight action’s new info…
Initially dipping a little deeper to 2077.00 gradually retraced much of Tuesday’s late dip, surging to 2084.25 at Europe’s opens. Reacting down sharply to 2078.25 was recovered entirely, blipping up momentarily to attack yesterday’s high within 3 ticks.
If, then…
Brexit and Yellen are again today’s main foci. Their near-term influence is fluid, but it is also expiring. The second half of Yellen’s semi-annual congressional testimony won’t be hanging over the market beyond noon. And Brexit’s results can become history after tomorrow evening. Yesterday morning’s reaction to Yellen’s rate hike defense was short-lived — today’s re-run could be very similar to last week’s FOMC policy statement by rallying temporarily into this morning’s comments. Brexit can only surprise bearishly, with the Ladbrokes / Betfair lines averaging 3.5-1 remain and 9-1 leave. The market still seems interested in retesting Monday’s 2092.50 high, as a detour on the way back down to 2070.75 and lower.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2088.00 would be likely to trigger the 2086.00 bias-up signal at 10:15. Exiting the open under 2081.25 would be unlikely to trigger bias-up.