The First Trade

Proper context can start the day with a solid win and make all the difference.

DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close…
Thursday’s wild ride had begun Wednesday afternoon, when its test of the room for noise up to 2626.00 began reacting down. The close had slid through 2613.00-2616.00 on the way to an overnight test of ~2598.00 “lower prior highs.” Thursday’s 2606.00 open immediately resumed the overnight recovery, attacking 2626.00 upon exiting the noon hour. Despite triggering bias-up, the bias environment only ranged sideways until a China trade headline triggered a surge to 2645.50. The headline’s denial triggered a 20-point reaction down that still recovered to close at 2635.00-2636.00. The minimum requirement from Tuesday’s confirmed breakout for at least an eventual third higher close was fulfilled, while closing above 2626.00 put into play the rally’s next higher objective at 2656.00.

Overnight action’s new info…
Firming a little further to 2640.00 through Thursday’s close reacted down to 2633.00 through the Globex open. The recovery soon resumed until attacking Thursday’s 2645.50 high to within 3 ticks. Ranging narrowly sideways through midnight greeted Europe’s opens back down at 2640.00. It wasn’t very defensive, but it was defensive enough, and the earlier overnight high was recovered. Another dip to the range’s lower-end was also recovered, and now breaking through yesterday’s highs up to 2649.25.

If, then… (notes to accompany the Tour recording)
Overbought RSIs at yesterday’s high had required a retest which is now neutralized. The only higher objective in-play is 2656.00, which can be invalidated by opening back under 2626.00, but no such effort is apparent — closing under 2606.00 today would be the last opportunity to invalidate yesterday’s close above 2626.00. Meanwhile, this afternoon’s bullish WedEX influence could help to extend a morning rally, or to retrace a morning pullback. Regardless, this being a three-day holiday weekend, any sponsored trending should take place this morning. And this being a Friday, the morning’s bias often persists through the noon hour.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2651.00 would be likely to exceed the 2647.50 bias-up target at 10:15 to renew the bias-up signal. Exiting the open at 9:45 above 2643.00 would be likely to trigger the 2640.00 bias-up signal at 10:15. Exiting the open under 2637.50 would be unlikely to trigger bias-up.

Proper context can start the day with a solid win and make all the difference.

DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close…
Wednesday’s gap up at 2614.75 blipped back down into Tuesday’s range before quickly extending higher to 2624.00. Just as quickly, Tuesday’s range attracted price back down to 2612.50. The choppy range persisted through the noon hour, before breaking higher to test 2626.00. Then Tuesday’s range attracted price back down one more time throughout the last 60-90 minutes. The drop reached only 2615.25 by the cash session close, qualifying as confirmation to Tuesday’s breakout session. Futures extended down to 2612.50. Bullish WedEX triggered.

Overnight action’s new info…
Wednesday’s drop was initially consolidated through the Globex open, but soon resumed. Extending down eventually probed under “lower prior highs” to touch 2596.50 soon after Europe’s opens. A bounce tested 2606.00-2607.00, but that has reacted back down to attack 2600.00.

If, then… (notes to accompany the Tour recording)
We’ve got quite a conflict between two patterns. Wednesday afternoon’s dip back into Tuesday’s range held on just enough to confirm Tuesday’s breakout, which requires an eventual third higher close. Meanwhile, the abrupt intraday reversal at 2626.00 is exactly the topping behavior that I’ve been describing to expect at this stage of the rally. The eventual third higher close can be delayed by an intraday or multi-session detour, which was already indicated while Wednesday’s high was forming. The overnight drop could be part of the topping pattern, if this reaction down is recovered to a fresh high close in the next several days. Already topped and reversing down would require the breakout to fail, which the confirmation process is meant to avoid, and which is very rare. We’ll adopt that posture if WedEX inverts by proxy by today’s open gapping down back under the pre-breakout ~2598.00 “lower prior highs” — which the overnight drop is already testing. Otherwise, sellers not exploiting the overnight attempt would reinforce the upside attraction, helped by the bullish WedEX’s influence tomorrow afternoon.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2606.00 would be likely to trigger the 2609.50 bias-down signal at 10:15. Exiting the open above 2612.00 would be unlikely to trigger bias-down.

Proper context can start the day with a solid win and make all the difference.

DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close…
Tuesday finally probed prior highs, and finally tested the rally’s 2606.00 next objective. A 20-point overnight rally to 2600.25 had been retraced back down to 2580.25 before the open. But it repeated intraday to attack 2614.00. Another 20-point dip to 2594.00 was recovered to within 2 points of 2614.00, before reacting back down to settle within 3 ticks of 2606.00.

Overnight action’s new info…
Choppy ranging tried breaking lower ever so slightly to touch 2602.50. It was enough of a stretch for the rubber band to snap back up and eventually probe fresh highs up to 2617.00. No improvement into or out of Europe’s opens didn’t help the rally effort, and price has since dipped back down to 2607.50.

If, then… (notes to accompany the Tour recording)
Essentially still overlapping 2606.00 during Tuesday’s final minutes didn’t allow closing above it to put into play the rally’s next higher objective at 2656.00. And now room for noise up to 2626.00 could still be tested today without yet putting into play the next higher target. Meanwhile, having met 2656.00, the pattern’s vulnerability to a collapse is at its greatest. Not yet reversing down by this afternoon would start replacing that vulnerability with a growing likelihood of extending to 2656.00.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2611.25 would be likely to trigger the 2608.50 bias-up signal at 10:15. Exiting the open under 2603.00 would be unlikely to trigger bias-up.

Proper context can start the day with a solid win and make all the difference.

DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close…
Monday’s session wasn’t much different than Friday. Both sessions can be defined as gapping down and then trending back up. Monday’s gap down to 2575.50 reacted down 4 points but stopped more than 3 points above Sunday night’s low, and quickly reversed up to 2588.00. The impatient optimism inhibited reinforcements, and its early momentum peak barely attacked 2590.00 during the afternoon. A late dip touched 2580.00 into the close.

Overnight action’s new info…
Globex initially ranged narrowly at 2580.00 but soon began trending back up. Hovering pessimistically short of Monday’s highs suddenly spiked up to 2595.00, and ranged flat-to-higher through midnight up to 2598.00. Another spike up pierced 2600.00, and all recent highs. Almost all of which has been traced. Reversing down into and out of Europe’s opens eventually attacked 2585.00. Its retest launched a bounce back above yesterday’s highs to 2592.00, which just collapsed 10 points to probe back under 2582.00.

If, then… (notes to accompany the Tour recording)
Throughout the past week’s ranging, this stage of the pattern has remained likely to probe fresh highs. Structurally, at least probing above prior highs. Calculably, to at least 2606.00. Overnight would suffice, but intraday is always preferable. Friday’s failed attempt at completely recovering from gapping down began undermining the likelihood of fresh highs with a vulnerability to just collapsing into a new downleg. More so after Monday’s similar pattern. Last night’s action isn’t optimal, but could suffice for a fresh high, and the pattern remains vulnerable to collapse. Not already collapsing into Tuesday’s open remains likelier to probe fresh highs, perhaps also 2606.00. Meanwhile, the overnight round-trip is threatening the 2580.00 earlier Globex low, after having probed above the prior session’s high, which could form a bearish Globex-flip setup. (I describe the Globex-flip setup in the Market Tour.)

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2590.75 would be likely to trigger the 2588.00 bias-up signal at 10:15. Exiting the open under 2584.25 would be unlikely to trigger bias-up.

Proper context can start the day with a solid win and make all the difference.

DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close…
Friday’s inside day offered nothing predictive or insightful to the bigger picture. It developed almost exclusively in negative territory, trending up from a gap down after mostly ranging sideways overnight. The morning’s bias-down held tests of its 2581.00 target down to 2577.00. Its recovery filled the gap back up to Thursday’s 2594.00 futures close by 2 points, and another dip’s recovery filled the gap back up to Thursday’s 2596.75 cash session close. Nothing about Friday’s session was predictive, let alone indicating the uptrend had ended short of testing the rally’s next higher objective at 2606.00. By the same token, nothing indicated that upside momentum had resumed, or that the recently formed Ascending Triangle would bother breaking higher before forming a reversal setup, and in either case ultimately collapsing.

Overnight action’s new info…
Sunday night’s open gapped down 4-6 points and and soon extended that to 2582.50. A consolidation there resolved down sharply to probe Friday’s lows by 3 points testing 2574.00. Ranging sideways through midnight 3-4 points either way around 2574.00 persisted through Europe’s opens, but eventually broke lower again to attack 2567.00 at Thursday’s gap down. Now a bounce is testing 2574.00 as resistance.

If, then… (notes to accompany the Tour recording)
Has so much selling pressure been expended overnight that the open inhibits reinforcements, and becomes more attractive to buyers? Simply greeting today’s open under Friday’s 2577.00 low would continue to make the current range vulnerable to launching a downleg. But the overnight dip is already testing Thursday’s 2566.00-2568.00 opening range. Maintaining its break through a relevant window could take 2606.00 of the table. But recovering back above Friday’s 2577.00 low through a relevant timing window would still allow that downleg to be delayed by a brief visit to 2606.00 or higher first. I suspect that even if we knew for certain that 2606.00 would be tested, gapping down may not begin recovering until after the 10:15 bias timing window has lapsed.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2574.00 would be likely to extend under the 2576.00 bias-down signal at 10:15 to renew the bias-down signal. Exiting the open at 9:45 above 2579.00 would be unlikely to extend back under the 2576.00 at 10:15