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…
Friday’s gap up to 2043.50 held up through the open, and extended up to 2055.50 through the morning’s bias environment. Up was then replaced by down. Trending down to 2044.75 through the afternoon bias environment did not exhibit a bullish WedEX influence. But sellers didn’t gain traction, as price remained in positive territory, and a late bounce retraced 61.8% back to the bias environment’s 2053.25 high.

Overnight action’s new info…
Roller coaster enthusiasts worldwide would love the price action seen so far. Five swings, each wider than the last, from 8 points on the first to 12 points on the fourth, each one testing and holding a bias signal. First, Sunday night’s gap up peaked immediately upon touching Friday afternoon’s 2053.25 bias environment high. Its reaction down touched Friday afternoon’s 2044.75 low. Then came another hill that climbed back to the high at 2053.75. So, back down again, to a fresh low touching Friday’s 2043.50 open. A brief stop to let children exit was followed by the biggest swing of the night — a 30-minute surge to fresh highs at 2056.00, which was quickly retraced to attack Friday’s low down to 2945.00.

If, then…
It had already become too late for WedEX to invert to bearish. Gapping up would be the clearest indication that its influence on this morning’s price action remains intact. Gapping down under Friday’s lows would be likely to recover from testing  Thursday’s 2039.50 “lower prior highs” as support, unless that were broken already by the open.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2040.75 would be likely to trigger the 2043.00 bias-down signal at 10:15. Exiting the open above 2050.50 would be unlikely to trigger bias-down. Exiting the open above 2056.00 would be likely to trigger the 2054.00 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…
Enough chipping away at 2035.00 support had essentially required probing fresh lows down to 2025.00-2027.00 Thursday. Gapping down was retraced to 2039.50 before resolving down to fresh lows at 2022.00. Firming into the noon hour extended choppily higher to test 2036.00 during the afternoon bias environment. That’s where the cash session closed, despite the last hour briefly touching 2038.50.

Overnight action’s new info…
Thursday’s futures close had firmed back up to 2038.50. Globex action resumed the rally up to 2046.50 ahead of Europe’s opens. Ranging back down to 2042.00 has tried once to break lower, and is now trying again.

If, then…
Yesterday afternoon’s rally gained no traction for its efforts — although it would have, had its last surge been 1 minute earlier. So, extending higher this morning relies on maintaining a gap up above prior highs. That’s essentially 2045.50, which is serving as resistance overnight. Otherwise, trending down this morning would be more likely than to simply back-and-fill and to wait for the afternoon’s bullish WedEX influence. How the open resolves a test of 2045.50 may determine whether we see 2033.00 and 2025.00-2027.00 again this week, or just 2056.00 and higher.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2040.75 would be unlikely to trigger the 2043.00 bias-up signal at 10:15. Exiting the open above 2045.50 would be likely to trigger bias-up. Exiting the open above 2051.00 would be likely also to exceed the 2048.50 bias-up target at 10:15 to renew the 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 morning’s probe under its bias-down signal down to 2035.25 was recovered in time to put into play an offsetting test of its bias-up signal. The steep morning rally wreaked of impatient buying. But overly-optimistic buyers triggered the afternoon’s bias-up signal and quickly met its 2057.75 target. But that only left buyers unable to defend against hawkish FOMC Minutes that triggered a 27-point plunge. Its 2033.00 objective was probed to within 1 tick of touching the nearly two-week old 2030.50 low. Its reaction up attacked 2046.00.

Overnight action’s new info…
Wednesday’s late bounce never extended, and soon began retracing back toward Wednesday’s plunge low. Support at 2033.00 has held repeated tests, optimistically avoiding a retest of yesterday’s low.

If, then…
Spotted the pattern? Optimism remains alive, which is potentially bearish from a contrarian perspective. Yesterday’s intraday rally had originated from only a very shallow probe under prior lows. Today’s rally attempts are likely to be more skeptical, so I wouldn’t trust any bounce prior to testing 2025.00-2027.00. While the price pattern doesn’t require bouncing at all, the ongoing optimism may interfere again. Unless the open were to recover positive territory and then extend higher quickly, fresh lows are likely.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2033.00 would be likely to trigger the 2036.00 bias-down signal at 10:15. Exiting the open above 2043.00 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…
Perhaps traction gained during Monday’s rally to 2068.50 was useful Tuesday in one sense — gapping open at 2057.00 exited the morning’s bias environment at 2057.00. But the afternoon bias environment’s entry found an air pocket under the morning’s 2052.50 low. A one-hour, 17-point slide exited the bias environment testing and retesting 2037.00-2038.00. The balance of the session ranged sideways back to 2045.00.

Overnight action’s new info…
Relatively narrow choppiness has remained within yesterday’s late range. Only briefly piercing above 2045.00, reactions down have only attacked Tuesday’s late lows.

If, then…
It’s important to note that overnight action following Friday afternoon’s 20-point slide had also ranged choppily ahead of the next open. That open greeted Monday at the same levels, then surged and extended through the morning and afternoon. Similar setups appearing consecutively tend not to resolve similarly. And the market is running out of bullish excuses to dismiss revisiting the prior Friday’s range. Gapping up above 2048.00 and extending through 2050.50 could marginalize sellers again. Otherwise, a morning rally would be unlikely without first rejecting a probe of fresh lows.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2037.25 would be likely to trigger the 2039.50 bias-down signal at 10:15. Exiting the open above 2046.50would 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…
Monday’s open wasn’t plunging from 2043.00, so the likely alternative was a recovery. The morning’s bias-up extended through its target, triggering the afternoon’s bias-up which probed its target up to 2068.50, The rally gained traction at the last two timing windows. That didn’t prevent signaling a retracement back to the 2060.00 area, and meeting it into the futures close.

Overnight action’s new info…
Narrow ranging supported by 2060.00 eventually began firming. That steepened into and out of Europe’s opens, probing yesterday’s high by 1 point up to 2069.50. But only briefly, as its reaction down has attacked 2060.00 to within 1 point.

If, then…
Was the overnight rally a harbinger of intraday follow-through, or did it fulfill the follow-through? Having gained traction, the rally need not resume immediately or aggressively Tuesday. But any post-open dip should be brief as the morning is still likely to trend to fresh highs. Gapping down under the prior afternoon’s 2059.25 low (which is also the morning’s bias-down signal) could invert Monday afternoon’s traction. This continues to be a risk only because its a pattern established by the prior two weeks’ initial recovery attempt. A lot depends on a second consecutive rally day, which would make new highs likely, and likely soon.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2058.00 would be likely to trigger the 2059.25 bias-down signal at 10:15. Exiting the open above 2065.00 would be unlikely to trigger bias-down. Exiting the open at 9:45 above 2069.25 would be likely to trigger the 2067.50 bias-up signal.