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 pre-open Employment Situation report was greeted at the 2039.00 lows of 2-1/2 week old decline from 2105.00. The next lower objectives at 2030.00 and 2035.00 were fulfilled before the cash session open, which surged immediately to attack 2047.00. Retesting 2035.00 launched another rally, lasting through the close and extending to 2052.00-2054.00. The pre-open low was a “new Globex trend extreme” that will require eventual retest intraday.

Overnight action’s new info…
Sunday night’s 2053.00 open quickly surged to attack 2058.00. Ranging back down to 2053.50 broke lower into Europe’s opens, probing negative territory down to 2049.00. Consolidating the dip for an hour then resolved up to probe fresh highs at 2059.50.

If, then…
Stopping short of 2056.00 Friday afternoon kept the session’s rally from reversing the trend up. If testing 2030.00 and 2035.00 ended the ongoing decline, then gapping up through 2059.50 is the next opportunity to try signaling it. Already testing 2059.50 overnight doesn’t make its recovery likelier, other than the nearer proximity. It’s still resistance, and holding its test still has a big consequence — like Wednesday night’s failed rally.

First Trade…
Exiting the open at 9:45 above 2057.00 would be likely to trigger the 2055.00 bias-up signal at 10:15. Exiting the open under 2052.25 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…
Gapping up 14-16 points Thursday would have rejected the ongoing downtrend. Wednesday’s night’s action fully tested that limit up to 2060.00, but greeted Thursday’s open at 2051.00. The morning slid back to unchanged around 2045.00, and the afternoon bias environment began by attacking Wednesday’s 2039.00 low to within 2 ticks. Two bounces testing 2045.00 defined sideways ranging into the close, as Friday’s approaching Employment Situation report inhibited trending.

Overnight action’s new info…
Thursday afternoon’s choppy ranging has essentially persisted, but decline seems eager to get on with it. Bounces still holding tests of the 2045.00 area. But their interim dips have probed momentarily to fresh lows at 2038.00. The latest bounce is being followed by a third drop to 2038.00, yet to recover.

If, then…
The decline has already identified its next objective at 2035.00 or 2030.00. I think the latter more so than the former, if not also lower to a 2027.00 handle. Buyers have ineffectually expended a lot of energy recently. Wednesday afternoon’s bounce had originated from just above 2039.00, where the bounce was retraced. Wednesday night’s bounce (and Thursday’s gap up) expended a lot of energy, too, also ineffectually, as we now know by its complete retracement to fresh lows. The ongoing decline should have little difficulty aggressively exploiting all of that failed buying pressure and chipping away at support, especially with the weekend’s impending illiquidity… If not — if the decline’s overnight eagerness becomes overly-pessimistic — then the likely alternative is a substantial rally.

First Trade…
Exiting the open at 9:45 above 2042.00 would be unlikely to trigger the 2041.00 bias-down signal at 10:15. Exiting the open at 9:45 under 2039.75 would be likely to trigger bias-down. Exiting the open under 2033.00 would be likely to renew the bias-down signal under its 2034.75 bias-down target 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…
Gapping down Wednesday to fresh lows testing 2042.00 was quickly retraced 11 points up to 2053.25, and was still 4 points below Tuesday’s close. Trending back down found fresh lows at 2039.00 during the afternoon bias environment. Choppy, flat-to-higher ranging retraced it to attack 2048.00, overlapping Friday’s lows into the close.

Overnight action’s new info…
The Globex session immediately began contrasting itself to Wednesday afternoon’s choppy, flat-to-higher ranging. Trending up through 2048.00 extended to attack 2057.00 ahead of Europe’s opens. A reaction down to 2051.50 was recovered by a surge up to 2060.00. The surge’s complete retracement down to 2051.00 is trying to recover, now testing 2055.00.

If, then…
Tuesday’s break putting into play 2030.00-2035.00 was not invalidated, but it wasn’t very productive. Hold-short was narrowly avoided as there remained vulnerability to a bigger bounce overnight. But actually reversing the trend would require gapping up to and through 2057.00-2059.50. In fact, the overnight high fully tested this resistance. Its reaction down to 2051.00 is both steep and deep, but it has plenty of time to recover. Regardless of gapping up and regardless of the overnight highs, not triggering bias-up would maintain the ongoing downtrend.

First Trade…
Exiting the open at 9:45 above 2052.50 would be likely to trigger the 2049.75 bias-up signal at 10:15. Exiting the open above 2057.00 would be likely also to exceed the 2055.00 bias-up target at 10:15 to renew the bias-up signal. Exiting the open under 2048.00 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…
Monday night’s slide had greeted Tuesday’s open back at Friday’s 2060.50 close, rejecting Monday’s interim rally. Probing lower and not exploiting recovery setups then indicated the trend was down, extending to 2048.00. Rallying into and out of the noon hour triggered the afternoon’s 2057.00 bias-up signal. Being only a correction, the rally extended quickly to within 1 tick of its 2063.50 target. Being a correction that had met its target, price fell back to 2052.50. The position-squaring window’s bounce attacked 2059.50.

Overnight action’s new info…
Firming into Asia’s opens had attacked 2060.50, but Tuesday’s late low was  soon being probed down to 2051.25. Europe’s opens triggered another attack on 2059.50, but that was soon retraced, and then reversed. Tuesday and Friday’s lows are being probed to 2041.00.

If, then…
There was no bullish reason to revisit Friday’s range. It had already recovered from probing early-April’s consolidation. Its breakout had launched the last rally leg, so retesting it once was done either to launch another rally, or else to break lower. Retesting it twice suggests the latter. Having failed Monday’s bounce from Friday’s testing the prior consolidation’s upper-end as support, a probe under its 2030.00-2035.00 lower-end is the next objective. A significant gap down is indicated, which if not being reversed through the opening 15 minutes, would suggest significant follow-through into the afternoon.

First Trade…
Exiting the open at 9:45 under 2042.75 would be unlikely to recover the 2046.75 bias-down target by 10:15 and renew the bias-down signal. Exiting the open above 2048.75 would be likely to recover the bias-down target through 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…
Monday’s 2065.00 open gapped up just above Friday afternoon’s high and essentially marginalized sellers for the day. The choppy morning finally started resolving up at noon, rallying from 2063.00 to 2077.00. Then it ran into the lower-end of the range that had preceded Thursday afternoon’s drop — “higher prior lows” and pivotal trendline at 2076.50-2077.50. Despite seeming relentless, the rally gained no traction as only the bias environment’s exit was above a prior timing window’s high.

Overnight action’s new info…
Flat-to-lower ranging back to 2072.50 was sent spiraling lower by a Australia’s interest rate cut. The pace began slowing after probing under yesterday’s 2065.00 open, but has nevertheless extended to attack 2057.00. That’s under yesterday’s 2059.50 post-open low

If, then…
Yesterday afternoon’s rally created a lot of room to absorb selling pressure before it could damage the recovery’s pattern. That room ended around 2068.00-2069.00. Just recovering it would be a 61.8% retracement from current lows. And no influential econ report is scheduled today that might be a catalyst. Independently recovering to 2068.00-2069.00 pre-open would be credible, but that’s still resistance. The most bullish scenario might be another choppy morning. Not renewing the bias-down signal — recovering the 2064.50 bias-down target — would be bullish. Anything less would be vulnerable to retesting Friday’s lows, and there’s no bullish reason for that.

First Trade…
Exiting the open at 9:45 under 2059.50 would be unlikely to recover the 2064.50 bias-down target by 10:15, renewing the bias-down signal. Exiting the open above 2066.00 would be unlikely to renew bias-down. Exiting the open above 2071.00 would be unlikely to trigger the 2069.75 bias-down signal.