The First Trade

fProper 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…
Firming out of the weekend made it clear there was no excuse to further delay not only probing fresh highs, but trending higher. The morning’s 9-point surge to 2109.00 Completely retracing it in reaction to Yellen’s comments was nevertheless recovered by a 13-point surge testing 2112.00. Fulfilling the morning’s “unfinished business above” let the last 60-90 minutes drift back to 2107.25 into the close.

Overnight action’s new info…
The late-afternoon pullback limit of 2107.25 had held its touch pre-close, allowing a deeper dip overnight that could avoid gaining traction. But only 1 point lower was probed before firming back toward Monday’s highs. Europe’s opens triggered a surge to fresh highs that extended to touch 2116.00. Its reaction down has touched 2113.00.

If, then…
The lower-end of the rally’s next higher objective at 2116.00-2119.00 was touched. It wasn’t put into play by closing above its last objective, so it is more vulnerable to rejection upon being tested intraday. Especially early, if its test reverses back under yesterday’s ~2112.00 high through the open, which could put sellers in control of the morning. Otherwise, maintaining a gap up would keep alive the entirety of the 2116.00-2119.00 objective, and potentially 2125.25.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2113.00 would be likelier to trigger the 2111.50 bias-up signal at 10:15, and under 2109.00 would be less likely.

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…
Plunging in reaction to Friday’s pre-open payrolls number had extended down through the open. Support was finally found within 1 tick of the 2082.50 renewed bias-down target. Its reaction up into the final hour tested 2101.00, which was 2-3 points short of regaining positive territory. But the rally gained traction by exiting the bias environment above the noon hour’s high, and then entering the final hour higher.

Overnight action’s new info…
Ranging flat-to-lower greeted Europe’s opens at 2095.00. That triggered a surge through Friday’s recovery high, still several ticks short of Thursday’s close

If, then…
Gapping up isn’t necessary to resume the rally without delay this morning, or to rally from a weaker open. But Friday’s payrolls shock seems to have been a detour, instead of its bounce only refueling sellers. And this weekend’s pro-Brexit gains seem irrelevant, after having been responsible for reversing last week’s initial probe of fresh highs. Without reversing another fresh high, or extending any early weakness, the coast seems clear for a broad rally effort targeting 2116.00-2119.00 .

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2105.50 would be likely to trigger the 2103.00 bias-up signal at 10:15. Exiting the open under 2095.75 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…
Thursday was the second consecutive session that overnight weakness extended to fresh lows through the open, only to reverse back up for the balance of the day. The open’s dip recovered from 2086.75 up to a last-minute touch of 2104.00. That fulfilled the required retest of Sunday night’s 2103.75 new Globex trend extreme. Tuesday’s 2100.00 gap up was retested, and still being overlapped into the close. The bias environment was exited above the noon hour’s high, but never got confirmation that the rally had gained traction for its effort.

Overnight action’s new info…
Volatility is often dormant ahead of the monthly Employment Situation report. Last night was no exception. An early blip-up made fresh highs up to 2105.00 (not qualifying as a new trend extreme), but price action since has ranged sideways. A touch of 2101.75 bounced back up temporarily to 2104.75. Its complete retracement has also bounced back, now touching 2105.00.

If, then…
Yesterday’s cash and futures sessions closes were above all prior intraday highs. But their structures were still overlapping the prior highs. The new high close isn’t necessarily disqualified from being a breakout, but it is in need of confirmation from a second consecutive higher close. Meanwhile, gapping up would be vulnerable to reversing down intraday, mostly through the open. Even trending up through the morning would be vulnerable to a late-afternoon reversal. Gapping down would be more vulnerable to extending down through the morning… NOTE: There is no Saturday Review this weekend, so post-market Wrap will be extended to discuss the bigger picture.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2106.25 would be likely to trigger the 2103.00 bias-up signal at 10:15. Exiting the open above 2111.00 would be likely also to exceed the 2109.50 bias-up target at 10:15 and renew the bias-up signal. Exiting the open under 2100.75 wold 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…
Not gapping up Wednesday had precluded the rally from trending up above the prior day’s range. Greeting the open at the prior day’s lows created a lot of room for rallying within its range. First, probing under the prior day’s lows had to be recovered. But positive territory had been recovered well before the afternoon’s Beige Book news, whose knee-jerk reaction down also resolved up. The prior day’s range was maintained, and the intraday rally didn’t gain traction for its efforts.

Overnight action’s new info…
Blipping up from the 2097.00 was reversed down 7 points through midnight to attack 2091.00. Already firming into Europe’s opens, now 2097.00 has been recovered.

If, then…
Wednesday’s intraday rally was limited because Tuesday’s late rally had not gained traction. Wednesday’s rally was able to develop because of the room created by gapping down. Thursday would be able to rally above Wednesday’s range by gapping up above it. Today’s ECB event (with Mario Draghi press conference) and OPEC meeting offer plenty of catalyst for gapping either up, or down. The upside potential remains unchanged at 2016.00-2018.00, while downside potential would face tough support at Tuesday and Wednesday’s lows.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2089.50 would be likely to trigger the 2090.75 bias-down signal at 10:15. Exiting the open above 2095.00 would be unlikely to trigger bias-down. Exiting the open at 10:15 above 2102.00 would be likely to trigger the 2099.75 bias-up 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)

Special note…
I’ll be unavailable during today’s final hour. There will be no Market Wrap or recording. Blog updates will be delayed until early evening. Thank you for allowing me this flexibility!

Through the prior close…
Monday morning’s slide from 2101.50 extended down to the last hour at 2086.00. The last 5 points were no-bias trending that required being retraced. Which they were. Trending up through the final hour had touched 2097.25 before a last-minute plunge to 2090.50. It was too late to be relevant to the pattern, which otherwise recovered back above the noon hour’s 2094.75 high.

Overnight action’s new info…
A push higher before midnight got back to 2099.25, 2 points above Tuesday’s last-minute high. But price action since then has only trended down. The 2089.00 area put up a fight, but now 2087.00 is being attacked, 1 point away from yesterday’s last hour low.

If, then…
Tuesday’s final hour recovery began too late for it to have gained traction, so extending it without delay requires gapping up. Gapping up depended greatly on extending bounce overnight, or at least not retracing it. So far, either bias signal has been tested, with the bias-down signal struggling to hold. Probing it could recover in time to avoid triggering — trending back above yesterday’s range wouldn’t be credible before the afternoon bias environment had begun lapsing. Otherwise, regardless of any “unfinished business above,” another session of backing-and-filling would be likely — at least until the afternoon’s Beige Book release.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2086.75 would be likely to trigger the 2089.00 bias-down signal at 10:15. Exiting the open above 2092.75 would be unlikely to trigger bias-down.