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…
Already firming up to 1995.50 ahead of Friday’s payrolls, its reaction spiked up to 2002.25. Reacting down sharply into and out of the open fell to 1984.00. Recovering to fresh highs at 2007.50 reacted down sharply again, back down to 1991.00. A late bounce enabled closing positive at 1996.00-1997.50.

Overnight action’s new info…
Immediately dipping at Sunday’s open was able to hold 1990.00. Relatively narrow ranging back up to 1994.50 was momentarily pierced up to 1996.00 after Europe’s opens. But that only stretched the rubber band,m which snapped back down to 1988.50 and 1985.25. Now a bounce is testing 1988.50 from below.

If, then…
Thursday night’s firming had already met the next higher objective at 1993.00. Its room for noise at 1997.25 and 2001.00 was met and held intraday Friday. Closing much higher today could invalidate the rally as being only a temporary correction before resuming the decline. Meanwhile, Friday’s new high close all but ensures an immediate pullback would recover into a new upleg. So, a successful top would close only slightly higher today — regardless of the intraday range and pattern. Recovering from a slightly lower open would be that path’s likely first couple of steps.

First Trade…
Exiting the open at 9:45 above 1988.00 would be likely to hold the 1986.00 bias-down signal through 10:15 to avoid renewing the bias-down signal. Exiting the open at 9:45 above 1993.75 would be unlikely to trigger the 1992.50 bias-down signal 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…
Thursday’s choppy ranging duplicated a choppy overnight that had probed new highs attacking 1288.00. Rallying into the afternoon extended to higher highs attacking the rally’s 1293.00 potential to within 5 ticks. No traction was gained for the effort, despite shrugging off anxiousness ahead of Friday’s payrolls report to produce a new recovery high close.

Overnight action’s new info…
After firming to touch 1993.00, a pullback fell to 1987.00 through Europe’s opens. Consolidating there was reversed up, recovering to fresh highs at 1994.50.

If, then…
The overnight probe of fresh highs is so far a singular probe, so it is not a “new Globex trend extreme” that would require intraday retest. Having produced fresh highs overnight after dipping under yesterday’s close, greeting the open under the overnight highs would be vulnerable to tending straight down this morning — at least, it would be a last line of defense. Recovering that deep of a dip through the open, or simply avoiding the dip altogether, would be similarly vulnerable to trending straight up.

First Trade…
Preliminary indications are not considered before an Employment Situation report.

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…
Not gapping up Wednesday prevented trending up immediately. But it didn’t default to a sell-off. Choppy trading did poke lower intraday, but didn’t extend down, while waiting for the afternoon’s bias environment to lapse. The balance of the session trended up to touch the 1984.75 overnight high’s “new Globex trend extreme” before the close.

Overnight action’s new info…
Initially pulling back to 1978.50 was recovered to higher and higher highs that eventually attacked 1988.00. Its reaction back down to 1978.50 had largely recovered before reacting down again under yesterday’s 1984.50 cash session close. Meanwhile, continually overlapping yesterday’s session has avoided creating another “new Globex trend extreme” which would have required intraday retest.

If, then…
Overnight choppiness around yesterday’s highs is another sign of waning upside momentum. Whether that’s potentially bearish, or even eventually bearish, it’s not necessarily immediately bearish. Beginning yesterday’s session with a similar challenge only delayed its later improvement. Today’s version of that challenge could still probe higher, perhaps earlier and only temporarily.

First Trade…
Exiting the open at 9:45 above 1987.25 would be likely to trigger the 1986.00 bias-up signal at 10:15. Exiting the open under 1979.75 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…
Invalidating the traction gained by Monday’s sellers required at least gapping up Tuesday to 1943.00, but then also extending higher from there. Tuesday’s gap up to 1943.00 first reacted down to attack 1938.00. But the delay was compensated by quickly rallying back to Monday’s 1956.00 high. That made Friday’s 1968.75 pre-open high retest likely, and its 1971.00 target was met during the afternoon bias environment. Resuming the rally extended it up to 1975.50 at the cash session close.

Overnight action’s new info…
Futures had extended already to 1978.50. Its extension up to 1984.50 was retraced into and out of Europe’s opens, back to and through yesterday’s cash session close. Now 1971.00 is being attacked as support. Meanwhile, there was enough complexity to the overnight extension to consider it a “new Globex trend extreme” that requires intraday retest.

If, then…
The 1971.00 target of retesting Friday’s pre-open high has not yet broken higher. Its initial test yesterday afternoon reacted down, the subsequent higher high at 1975.50 reacted down to 1971.00, and its recovery made no higher high before the cash session close. Only futures have probed higher — and despite probing substantially higher, 1971.00 has attracted price back down to it again. Since buyers didn’t gain traction yesterday, extending the rally requires gapping up. A more subtle beginning to retesting the overnight highs would be vulnerable to reversing down hard this afternoon.

First Trade…
Exiting the open at 9:45 above 1979.25 would be likely to trigger the 1977.00 bias-up signal at 10:15. Exiting the open under 1971.00 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…
Recovering an overnight dip down to 1928.00 enabled a relatively flat open around 1946.00. Extending 10 points higher probed Friday’s range up to 1956.00 Despite starting a little late to be durable, the rest of Friday’s range could have been retraced, too. Never mind that, an afternoon slide fell back down to overnight lows, gaining traction for its effort.

Overnight action’s new info…
Lower lows soon came within 3 ticks of critical support at 1920.00. But the balance of the night has rallied, eventually testing yesterday’s open around 1946.00. Its reaction down has recovered to momentarily attack 1948.00.

If, then…
I gave yesterday morning’s late rally too much credibility for being able to extend through 1952.00-1953.00. The afternoon slide earned more credibility than I had given it, not only fulfilling its potential to retest 1933.00, but then also retesting 1930.00. Now the overnight rally is threatening that credibility. Much can happen in this pattern before the open. But just gapping up above 1943.00 could negate rewarding yesterday afternoon’s sellers with control of this morning’s bias environment. Gapping up above 1951.00 would be the optimal rejection, targeting a retest of 1969.00.

First Trade…
Exiting the open at 9:45 above 1948.00 would be likely also to exceed the 1946.00 bias-up target at 10:15 to renew the bias-up signal. Exiting the open above 1944.00 would be likely to trigger the 1940.25 bias-up signal at 10:15. Exiting the open under 1937.75 would be unlikely to trigger bias-up.