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…
Brexit optimism was downsized by Yellen fears. Gapping up Sunday had extended higher overnight to 2097.50, relentlessly and single-mindedly. Monday’s open was greeted by a last-minute dip to 2082.00. Post-open action extended the rally to attack 2093.00. The noon hour sawed through 2082.00 and fell through the futures close to 2071.00. .

Overnight action’s new info…
2071.00 had been the room for noise under the afternoon’s 2074.50 objective. Literally, the drop was as deep as possible without putting into play any lower objectives. That maximum vulnerability was easily exploited by new Brexit polls that triggered a surge to 2083.00. Dipping back down to 2074.50 was gradually recovered overnight — relentlessly and single-mindedly, albeit less aggressively than Sunday night — up to 2086.00.

If, then…
Is hope “springing eternally,” or is it being batted about? If overnight action is the domain of Brexit, then intraday action may be a function of Yellen’s congressional testimony. That’s likelier to stress rate hike than QE, which was probably a big factor behind yesterday afternoon’s slide. But Brexit optimism has eviscerated that discount — right back up to the resistance of this morning’s 2086.00 bias-up target. Not quickly rejecting the overnight rally could extend to retest yesterday’s highs by 2 points. Reacting down from the gap up could extend yesterday afternoon’s slide back under last week’s lows.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2088.00 would be likely also to exceed the 2086.00 bias-up target through 10:15 to renew the bias-up signal. Exiting the open under 2076.75would be unlikely to trigger the 2080.50 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…
Gapping down a little Friday to 2068.00 extended down a lot to the morning’s 2053.25 low. The balance of the session “rallied” to 2065.25 in a series of higher highs and higher lows, albeit never leaving negative territory. The last hour dipped a little and then a lot to eventually touch 2057.75. That was still 2 points too high to consider WedEX.fulfilled its bearish signal.

Overnight action’s new info…
Poll results showed the Brexit “remain” support rising sharply. Sunday night’s open gapped up to 2071.00 and extended steadily overnight up to 2087.50. That’s back to last Friday’s close, which last Monday morning had probed only momentarily before extending the prior week’s decline.

If, then…
Has the rally’s corrective phase been exited, or is the overnight rally refueling sellers? The potential rally we discussed this weekend has been triggered by a favorable poll, and not by simply delaying the Brexit vote. Anti-Brexit forces had regained so much ground so quickly, that its sponsors would be foolish to delay the vote. So, the rally gets the best of both worlds. And knows it. Two questions now are whether the rally extends intraday, as the bearish WedEX influence arrives at the open. Trending down from the open should be obvious early, or it won’t be relevant.

First Trade…
[Click here to view the Bias parameters] The bias-up parameters are far below current ranging. However, exiting the open at 9:45 above 2089.25 would be likely to extend higher this morning. Exiting the open under 2079.50 would be likelier to trend back 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…
Overnight optimism ahead of Wednesday’s FOMC events left a little on the table for post-open gains. But only a little, and even less for the predictable relief “rally” (more accurately, a blip-up) on the no-change news. But it wasn’t very long after Yellen’s Q&A that a plunge fulfilled the balance of expectations by retesting 2063.50. It was still being tested at the close.

Overnight action’s new info…
Ranging couldn’t withstand the Nikkei plunging, triggering a break under Tuesday’s 2054.75 lows down to 2051.75. That’s where Europe’s opens were greeted, and price has firmed to 2058.00.

If, then…
The only variable to yesterday’s template not met was to probe or attack Tuesday’s lows. Delaying either would only require a probe. Isolating that to the overnight session would require recovering to gap up at Thursday’s open. Meanwhile, the 2043.00 objective remains in-play. And maintaining a gap down under Tuesday’s lows could make the Bearish WedEx become Actively bearish, albeit delayed.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2050.50 would be unlikely to recover the 2053.00 bias-down target through 10:15 and renew the bias-down signal. Exiting the open above 2060.50 would be unlikely to trigger the 2059.00 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…
Hope sprang eternal Tuesday, to the extent possible for trading almost entirely in negative territory. Gapping down to 2065.00 bounced immediately, filling the gap from Monday’s 2069.75 close up to 2072.75. Sliding sharply to 2054.75 into the bias environment exit reacted up again to the 2065.00 open. The final hour was greeted back at the morning’s 2054.75 low, which then bounced throughout to within 2 points of Monday’s close.

Overnight action’s new info…
Encouraged by China devaluing the Yuan to its lowest levels in 5 years, hope is springing overnight, too. Globex dipped initially to 2059.75 which retraced 61.8% of Tuesday’s final hour rally. Since that correction, the balance of the night has rallied. Yesterday morning’s 2072.75 high was retested by 2 ticks before dipping 3 points.

If, then…
Closing above yesterday morning’s 2072.75 high would have sealed a bottom by holding the test of 2063.50. No opening strength today can serve by proxy, because it would leave outstanding a gap back to yesterday’s lower close. And that’s assuming the overnight rally can even extend above yesterday morning’s high. If there’s something to be said for positioning ahead of a relief rally to be triggered by this afternoon’s likely FOMC inaction, then it goes equally to sell strength when anxiousness ahead of the news paralyzes price action. Probing higher this morning is possible, but unlikely to resolve favorably. The most bullish template would probe intraday under yesterday’s lows, and then recover to close above yesterday’s highs.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2072.75 would be likely to trigger the 2069.75 bias-up signal at 10:15. Exiting the open under 2066.50 would be unlikely to trigger bias-up.