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 open blipped-down to touch the 2081.75 bias-down signal. Without triggering it, an offsetting test of the 2091.00 bias-up signal was put into play. That didn’t prevent a mid-morning drop to the 2075.50 bias-down target. But holding its test only cemented the 2091.00 objective into becoming “unfinished business above.” Friday afternoon rallied to fulfill two interim objectives, first retracing the morning’s bias-down signal, and then extending to the 10:15 2086.00 print. No traction was gained, but oversold RSIs were left outstanding at the low.

Overnight action’s new info…
Don’t blink, you’ll miss it… Sunday night’s open gapped up to 2091.50, immediately fulfilling Friday’s unfinished business above. That bit of optimism was reversed abruptly by a reversal that eventually tested 2081.75. A bounce attacked 2086.00 into Europe’s opens. Its optimism was also reversed abruptly, too, by steep slide that tested Friday’s 2075.00 low down to 2074.00. Optimism is poking its head out again, retracing all of the last drop to attack 2086.00 again.

If, then…
Unfinished business below and above at 2075.00 and 2091.00 did not require intraday retest. Their attractions are now neutralized. And the open is indicated essentially unchanged around 2086.00. Opening flat with no outstanding attraction would make for a very lifeless morning. Resuming the rally is still likelier, more so after three overnight instances of quashing optimism. The latest instance — recovering the steep slide from 2086.00 — has formed a Symmetrical Triangle whose break lower may be resolving up now. Gapping up would be helpful confirmation, while a flat open would suggest another attack on the lows.

First Trade…
Exiting the open at 9:45 under 2086.00 would be unlikely to trigger the 2089.25 bias-up signal at 10:15. Exiting the open above 2091.00 would be likely 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…
Wednesday night’s recovery attempt up to 2104.00 had been retraced to greet Thursday’s open unchanged around 2096.00. The reversal extended through the open and through the afternoon to attack 2082.00. The last 60-90 minutes ranged choppily sideways ahead of post-close earnings from GOOG and MSFT. Sellers gained no traction for their efforts.

Overnight action’s new info…
Plunging in reaction to earnings extended down to test 2078.00. Its reaction up extended higher relentlessly, probing the late-afternoon 2087.50 resistance up to 2089.00. Europe’s opens began a reversal that extended to 2079.00, which — like the post-close plunge — has been retraced back up to 2087.50.

If, then…

The chart reminds me of the iconic cat poster “Hang in there, weekend’s coming!” The drop from Wednesday afternoon’s doomed high is dangling at support — and there’s a bit of a drop below. There’s also a way up. Having trended down into Thursday’s close, gapping up Friday above the afternoon’s 2090.25 high could form a “session-long rally” setup. And a retest of last year’s last relative highs at 2110.00 would not be difficult to reach. Testing 2090.25 at or just before the open would require either forming the setup, or else duplicating yesterday’s decline. And that would target 2076.00 if not also 2067.00.

First Trade…
Exiting the open at 9:45 Exiting the open under 2079.00 would be likely to trigger the 2081.75 bias-down signal at 10:15. Exiting the open above 2083.50 would be unlikely to trigger bias-down. Exiting the open above 2093.75 would be likely to trigger the 2091.00 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…
An overnight rally to 2098.00 had pulled back just enough to avoid gapping up at Wednesday’s open. That created an objective at 2088.25, which was attacked to within 5 ticks before OPEC’s headlines triggered a surge to fresh highs above 2100.00. We knew to expect the rally’s failure since it was no-bias trending, and since Tuesday’s buyers had not gained traction. Waiting until 2105.25 only exacerbated the failure, which almost 10 points into the close.

Overnight action’s new info…
A slightly lower low at 2095.00 was recovered 2104.00 into midnight. That steady recovery has been replaced by a choppy decline back to yesterday’s 2096.50 cash session close. Its reaction up is now testing 2100.00. The ECB monetary decision and Draghi’s always-volatile press conference still lie ahead.

If, then…
The retest of last year’s last relative high at 2110.00 is very close. More than touching it is likely before reacting down durably, but only attacking it could react down substantially. Yesterday’s no-bias trending is the work of overly-optimistic weak hands, which appears more often before turning points. If yesterday’s late plunge was a warning shot, then exiting today’s open any lower could target yesterday morning’s “unfinished business below” at 2088.25 and lower.

First Trade…
Exiting the open at 9:45 above 2103.50 would be likely to trigger the 2101.00 bias-up signal at 10:15. Exiting the open under 2098.50 would be unlikely to trigger bias-up. Exiting the open at 9:45 under 2088.25 would be likely to trigger the 2093.00 bias-down signal at 10:15.

Sorry for the confusion — here’s the correct chaRTroom link:

CHARTROOM LINK
(pre-open Market Tour begins at 8:55 ET)

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 “new Globex trend extreme” at 2098.50 had reacted down into Tuesday’s open, and then attacked to within 3 ticks at the morning’s high. Its intraday retest remains outstanding. The noon hour’s dip to 2085.00 in the same pattern we saw at Friday afternoon’s low, giving us very early anticipation for a reaction target of 2095.50 that was met at the close. The rally failed to gain traction for its efforts.

Overnight action’s new info…
With near-term buying pressure satisfied, the Globex open immediately began trending down. The reversal extended relentlessly into Europe’s opens before bottoming at 2086.00. A recovery eventually began, and it is now probing yesterday’s highs up to 2098.00.

If, then…
Having failed to gain traction for yesterday afternoon’s efforts, the rally can extend higher this morning only by gapping up. Retracing all of the overnight drop is encouraging, and opening above the “new Globex trend extreme” at 2098.50 would be more promising. But in either case, the opening 15 minutes must still extend to higher maintain momentum. Otherwise, probing under yesterday’s lows would not be surprising.

First Trade…
Exiting the open at 9:45 above 2098.50 would be likely to trigger the 2096.25 bias-up signal at 10:15. Exiting the open under 2093.75 would be unlikely to trigger bias-up.