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…
Rallying overnight through the 1952.00-1953.00 objective attacked 1969.00. It was all retraced into and out of Friday’s open to pierce back under Thursday’s 1949.50 high. The balance of the session gyrated down to 1943.00. No traction was gained. But 1952.00-1953.00 was rejected.

Overnight action’s new info…
Sunday night’s opening dip to 1938.00 was soon recovered up to 1947.00. And that was the last of that. Returning to the open’s low finally broke lower on the way to testing 1928.00. Ranging choppily up to 1934.50 for several hours ended abruptly by spiking up 11 points to test the resistance of this morning’s 1940.25 bias-down signal on China’s news. Its reaction down to 1931.50 was recovered entirely, and consolidating there has broken higher to  1943.50.

If, then…
Not gaining traction Friday despite trending down from open to close had made extending down today unlikely without delay — not without gapping down significantly. Significantly, as in under 1937.00 or 1930.00.Having tested 1930.00 overnight, just opening positive above 1946.00 would allow not only probing back into Friday’s range at 1952.00-1953.00, but would also allow retesting Friday’s pre-open attack on 1969.00. Now having tested 1930.00 overnight, opening under 1937.00 could marginalize buyers for the day.

First Trade…
Exiting the open at 9:45 above 1946.00 would be unlikely to trigger the 1940.25 bias-down signal at 10:15. Exiting the open under 1939.00 would be likely to trigger the 1940.25 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…
Surging momentarily at Thursday’s open was followed by consolidation through the morning and noon hour. The afternoon bias environment finally broke out of the funk to fill the gap back to Monday’s 1942.00 cash session closing equivalent. The final hour surged into and out of the futures close to within 2 ticks of its potential to 1952.00-1953.00.

Overnight action’s new info…
Ranging narrowly flat-to-higher repeatedly attacked 1953.00 closer and closer. Its break was underway already into Europe’s opens. And it kept going, rallying along with Crude Oil to attack 1969.00.

If, then…
The rally’s good news is that it’s unlikely to end today. Sliding immediately and relentlessly would leave a gap outstanding at the open. The rally’s bad news is that it’s vulnerable to sliding immediately and relentlessly. Testing 1952.00-1953.00 need not peak there, although it did until Europe’s opens approached. Without a consolidation above 1952.00-1953.00 there is no requirement to recover its eventual reaction down. And not much motivation, not ahead of two days of illiquidity careening into a 2-day, 82-point rally. The rally’s nightmare would be to open well under the overnight high, making its gap easier to fill sooner, with plenty of time to attract counter-trend sponsorship.

First Trade…
Exiting the open at 9:45 above 1959.50 would be likely also to exceed the 1958.00 bias-up target at 10:15 to renew the bias-up signal. Exiting the open under 1956.50 would be unlikely to exceed the bias-up 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…
Having ignored the open’s window for recovering immediately, Wednesday’s gap down extended deeper to its next support at 1890.00. Multiple tests held through the morning’s bias environment, and its exit surged to fresh post-open highs. That fulfilled a bullish setup likely to end the day much higher — and the cash session touched 1929.25. Buyers gained traction.

Overnight action’s new info…
Extending higher into and out of the close soon touched 1938.50. Reversing down into and out of Europe’s opens almost touched 1920.00 before recovering back to and through yesterday’s highs, now testing 1936.00.

If, then…
Rewarding yesterday’s buyers for having gained traction would probe higher this morning, or at least recover a knee-jerk reaction down from surprising news. The minimum upside objective is to retest overbought RSIs at Monday afternoon’s 1943.75 high, probably up to 1946.00, and potentially to 1952.00-1953.00.

First Trade…
Exiting the open at 9:45 above 1936.75 would be likely also to exceed the 1934.25 bias-up signal through 10:15 to renew the bias-up signal. Exiting the open above 1931.25 would be likely to trigger the 1927.25 bias-up 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…
After bouncing from an overnight slide, Tuesday’s open was flat with Monday’s 1936.50 futures close. The slide resumed anyway, to 1919.00 in the morning and then much later down to 1916.00. Not too late for 7-1/2 point bounce, or for the futures close to retrace it all back down to 1916.00.

Overnight action’s new info…
Tuesday’s late drop extended down immediately to range narrowly around 1914.00. Bouncing 4-1/2 points resolved down to attack 1909.00. Bouncing 11 points to a fresh high was also temporary until Europe’s opens. Its reversal has extended sharply lower to 1896.00.

If, then…
Monday’s high left outstanding overbought RSIs requiring a retest at 1944.00. The gap back up to its 1942.00 cash session closing equivalent is an attraction, too. An opportunity gap down irrecoverably Tuesday was rejected. So, the subsequent downleg’s context is of a temporary correction. Testing “lower prior highs” as support is not unusual before recovering. Problem: 1914.00 was the lowest lower prior high with potential to be tested, and likely to launch the high’s retest. But the overnight action has fallen well under it. The extreme sentiment of relentless overnight trending is often a sentiment extreme that reverses direction at the open. The window for that isn’t very wide, and not very forgiving — extending down post-open could double the overnight slide by noon.

First Trade…
Exiting the open at 9:45 above 1905.00 would also likely recover the 1908.00 bias-down target by 10:15 to avoid renewing the bias-down signal. Exiting the open under 1901.00 would be likely to extend down to 1890.00.

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…
Bullish WedEX influence may have contributed to Sunday night’s strong rally. The influence likely contributed to Monday’s post-open surge up to 1943.00. Perhaps it required the surge’s reaction down to be recovered, which the afternoon did by 3 ticks. But WedEX influence had expired by then, so it didn’t require a new upleg. Monday’s relatively narrow ranging around Feb 1’s prior high persisted through the cash session close at 1942.00.

Overnight action’s new info…
Suddenly sliding 6-1/2 points into the futures close at 1935.25 was extended deeply overnight. Last Wednesday and Thursday’s “lower prior highs” were probed down to 1924.50 through Europe’s opens. That has been recovered back up to unchanged at 1936.50.

If, then…
The only immediate trend reversal setup is a gap down back to last week’s lower prior highs. The overnight drop showed it to be possible. Its recovery suggests it’s not probable. While simply piercing the prior high does fulfill the minimum requirement for a top, another higher high would be more appropriate before the next downleg begins.

First Trade…
Exiting the open at 9:45 above 1935.25 would be unlikely to trigger the 1933.00 bias-down signal at 10:15. Exiting the open under 1929.00 would be likely to trigger bias-down.