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 morning’s choppiness had ranged between 2051.50-2063.50, literally 6 points either way around its flat 2057.00 open. Two probes into positive territory were each followed by probing negative territory. The second probe never recovered, sliding through the noon hour and bias environment. The 2046.00 overnight low was probed down to 2038.50, back into the prior Friday’s range, before firming to close at 2042.25-2043.50.

Overnight action’s new info…
Sunday night’s open spiked down to 2035.00 and immediately began firming. The steady rise had soon recovered positive territory, eventually probing it up to 2049.25. Gradually lower highs have been hovering for hours at or above Friday’s 2042.25-2043.50 close.

If, then…
Dipping into the prior Friday’s range — the multi-week decline’s lows — essentially requires resolving suddenly. Essentially. Almost any delay to resolving down would get a slight benefit of the doubt for resolving up, if only by default as the decline fails to attract new sponsorship. Actually, ONLY by default. Rallying would still need to trigger a signal, at least a bias-up. Meanwhile, probing lower can still be absorbed if not maintained through a relevant timing window. Last night’s momentary spike down is one example that I described during this weekend’s Saturday Review.

First Trade…
Oddly, there are no preliminary levels in the overnight pattern for anticipating the morning’s Bias 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 night’s rally offered Thursday’s open an opportunity to trigger a bullish setup. Thursday’s open declined, figuratively and then literally. By only attacking 2070.00 instead of recovering it, the entire morning trended down until printing 2048.50 at noon. Rallying through the bias environment’s exit reached 2066.50 to setup another bullish opportunity. But the final hour slid back down to Wednesday’s 2057.50 lows. Overbought and oversold RSIs were left outstanding at either extreme.

Overnight action’s new info…
Firming never gained traction, and Thursday’s final hour slide soon resumed. Ranging narrowly at 2051.50-2053.50 broke to fresh lows down to 2046.25 into and out of Europe’s opens. A couple of big bounces have tried recovering the 2051.50-2053.50 range, which is now being retested.

If, then…
Last night’s lows pierced the upper-end of last Friday’s range. It was only momentary, although prior to Tuesday’s rally that would have been enough to break its support. That premise will likely be tested, along with Friday’s 2045.00 “lower prior highs,” if the overnight lows aren’t compartmentalized. Still, opening above yesterday’s lows may not be enough to reverse momentum up without also trending up quickly. Regardless of the direction, this is not a very comfortable area for the market, so it’s likely to try trending away from it — aggressively, if up — instead of ranging narrowly.

First Trade…
Exiting the open at 9:45 above 2057.00 would be unlikely to trigger the 2055.25 bias-down signal at 10:15, and under 2051.50 would be likely to trigger it. Exiting the open under 2046.00 would be likely also to exceed the 2049.75 bias-down target at 10:15 to renew the bias-down 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…
After Tuesday’s session-long rally to attack its 2080.50 target, Wednesday’s gap down to 2074.25 didn’t signal strong-handed selling pressure. But not immediately rallying did keep the door open to extending the overnight pullback. And that’s what happened after a momentary surge to 2087.50 with Crude Oil. The morning probed overnight lows down to 2069.00 and the afternoon resumed the decline to within 1 tick of 2059.50. It was an “inside day,” but sellers gained traction.

Overnight action’s new info…
The drop’s next two targets had been 2059.50 and 2058.00, and the latter was quickly pierced by 2 ticks. Its reaction up to 2062.00 was retraced entirely. The next bounce to 2064.00 was retraced almost entirely, too. The next bounce has extended up to 2071.50.

If, then…
Yesterday’s post-market Wrap described several bullish influences operating on yesterday’s decline — such as it being an inside day, extended by a Symmetrical Triangle, and the afternoon’s drop being “no-bias trending.” The only bearish influence was the afternoon’s sellers gaining traction. Sellers’ traction can be inverted by rejecting the afternoon’s decline from the bias environment’s 2069.50 high. Since yesterday ended by trending down, the same rejection would also form a “session-long rally” setup. The overnight rally is in position, so failing to exploit the opportunity would be as bearish as the missed opportunity would have been bullish. And it’s pretty bullish, both targeting Tuesday’s high and then also likely resuming the rally.

First Trade…
Exiting the open at 9:45 above 2071.00 would be likely to trigger the 2067.50 bias-up signal at 10:15. Exiting the open above 2077.75 would be likely also to exceed the 2074.00 bias-up target at 10:15 to renew the bias-up signal. Exiting the open under 2066.00 would be unlikely to trigger the 2067.50 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…
The rally’s next higher objective at 2080.50 was met to within 2-3 ticks. Each of Tuesday’s timing windows probed a fresh session high on the way to a 25-point gain — 31 points when including Tuesday night’s initial drop to 2048.00. The rally gained traction by exiting the bias environment at 2:30 above the noon hour’s high, and then also trending to fresh highs through the 3:10-3:20 window.

Overnight action’s new info…
Dipping immediately at last night’s Globex open has extended down to 2069.50. Its reaction is testing 2075.00 as resistance, which is essentially yesterday’s noon hour high, and still indicating a gap down.

If, then…
Gaining traction yesterday suggests the rally will resume this morning, even if the open were to gap down — so long as the gap isn’t under yesterday afternoon’s 2072.00 bias environment low, which could instead invert the bullish signal to bearish. Having tested last Monday’s highs, trending up this morning above yesterday’s highs would all but confirm the ongoing decline has ended. But the most bearish scenario should be limited to a test of 2059.50. And there is no bearish scenario until this afternoon if the open has resumed rallying.

First Trade…
Exiting the open at 9:45 above 2077.75 would be unlikely to trigger the 2073.00 bias-down signal at 10:15. Exiting the open under 2071.25 would be likely to trigger bias-down.

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…
Sunday night’s test of 2059.50 resistance was reversed down to 2049.00 into Monday’s open. That range essentially defined the session. A quick surge attacked 2059.00 before reversing almost as quickly to 2048.50. Recovering the opening surge reversed down again, ending the day unchanged at 2054.00. Buyers gained no traction, and three opportunities failed to launch a rally. Meanwhile, sellers also failed to exploit even greater opportunities to resume the ongoing decline.

Overnight action’s new info…
Monday’s session had ended by reacting down from attacking 2059.00. The Globex open immediately resumed the reaction, plunging to 2048.00 and retesting Monday’s pre-open and intraday lows. Identical to those earlier drops, price both reversed up abruptly, and also extended to attack 2059.00. But this time was different. Europe’s opens followed a pop-up to 2062.50, and then soon followed by a bigger surge to 2068.00. Eventually touching 2069.25 has reacted down, gradually back to 2064.00 and now aggressively to attack 2060.00.

If, then…
Monday’s bias environment exit was borderline for gaining traction, no matter how decisively the final hour was entered. We knew at yesterday’s close that resuming the rally this morning would require gapping up. And we suspected that would happen since sellers had failed to exploit intraday vulnerabilities. Gapping up must be maintained and preferably also extended to prevent reversing back down post-open — especially having met 2068.00 resistance after ending yesterday’s session unchanged.

First Trade…
Exiting the open at 9:45 above 2066.00 would be likely to exceed the 2063.25 bias-up target at 10:15 and renew the bias-up signal. Exiting the open above 2061.00 would be likely to trigger the 2057.75 bias-up signal. Exiting the open under 2054.25 would be unlikely to trigger bias-up.