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 shallow gap down consolidated the overnight dip through the bias timing window down to 1898.50. Tests of both bias-down parameters held through 10:15, although the bias-down signal was recovered late at 10:30. Anyway, the morning firmed up to 1916.00, and the balance of the session ranged sideways.

Overnight action’s new info…
Gapping down several points Sunday night attacked Friday afternoon’s 1908.00 low. That was soon recovered on the way to higher and higher highs throughout the night. Most recently attacking 1938.75 has reacted down to 1932.50.

If, then…
The overnight rally does not directly fulfill the actively bullish WedEX, but it does help to confirm the market’s upside vulnerability that was originally signaled Wednesday. However, having rallied aggressively per the signal’s remaining influence, a post-open recovery from reacting down would fulfill the signal. As would extending the rally throughout the morning. Regardless, no compelling sell signal is likely until the bias environment comes within view of lapsing.

First Trade…
Exiting the open at 9:45 under 1929.25-1930.25 would be likely to extend back down to the 1923.00 bias-up signal as support. Exiting the open above 1932.00-1932.50 would maintain the upward momentum.

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…
Conditions at Wednesday’s close had suggested Thursday’s session was likely to back-and-fill, which it did. Thursday’s 1927.25 high had been probed overnight up to 1933.25, but the open was back at or under 1927.25. And the balance of the session repeatedly dipped to attack 1911.00-1912.00 three times. Sellers gained no traction for their efforts.

Overnight action’s new info…
Eventually firming up to 1922.75 was reversed back down to and through Thursday’s lows to 1906.50. A bounce is now testing 1911.00-1912.00.

If, then…
The actively bullish WedEX signal had been one reason for Thursday’s session to back-and-fill. Its bullish influence Friday afternoon allowed for weak-handed sellers. Thursday’s sellers didn’t gain traction, so that template appears to be developing. Now maintaining the template would disallow gapping down, or else rallying immediately out of a gap down. Gapping down would allow yesterday’s decline to extend despite sellers not having gained traction, which would undermine the afternoon’s impending bullish WedEX influence. So, gapping down without recovering is the only setup that could begin to invalidate the bullish WedEX.

First Trade…
Exiting the open at 9:45

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 Wednesday immediately fulfilled the rally’s next higher objective at 1907.00. It was soon exceeded on the way to fulfilling its potential to 1920.00. Higher and higher highs were probed, up to 1924.50 and 1927.25, each time reacting back down to test 1920.00 briefly as support. Buyers didn’t gain traction for their effort (although the bias environment exit was above the its prior timing window, the final hour’s entry was not).

Overnight action’s new info…
Quickly returning to Wednesday’s 1927.25 high eventually blipped-up to 1931.50. Like yesterday’s probes, another reaction down tested 1920.00, this time more deeply down to 1916.75 (within 1 tick of this morning’s bias-down signal). But also like yesterday’s reactions, that recovered to another higher high at 1933.50. And now its reaction down is attacking 1928.00.

If, then…
Not gaining traction yesterday requires the open to gap up if the rally intends to extend higher without delay. That’s half the battle. The setup also requires extending higher through the opening 15 minutes of volatility. Trending up is difficult if 1920.00 is still attractive. And since yesterday’s setup was similar, it’s unlikely to repeat today. Not gapping up at all would simply be vulnerable to trending back down through the morning.

First Trade…
Exiting the open at 9:45 above 1929.00 would be likely also to trigger the 1927.75 bias-up signal at 10:15. Exiting the open under 1921.25 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…
Tuesday morning’s gap up preserved much of the holiday rally. But post-open action dipped. Not immediately — in fact, late enough to indicate its sponsorship was weak-handed and temporary. It was meanwhile productive, but testing the morning’s 1871.50 bias-down target launched a reversal that stopped less than 1 point short of holiday’s high at 1892.00 where the afternoon ranged sideways.

Overnight action’s new info…
Tuesday afternoon’s ranging soon broke higher to 1897.50. That was already calculated to be this morning’s bias-up target. Then it broke lower to test this morning’s 1882.00 bias-down signal. Rallying into and out of Europe’s opens has extended to 1905.75.

If, then…
Despite buyers not gaining traction yesterday afternoon, a reward was still in order for having absorbed the morning’s dip. Its minimum higher objective at 1907.00 is being attacked pre-open. And despite buyers not gaining traction yesterday, the rally can resume immediately by gapping up. And by maintaining the gap up.

First Trade…
Exiting the open at 9:45 above 1907.00 would suggest the balance of the morning will extend higher, potentially targeting 1920.00. Exiting the open at 9:45 under 1898.25 would be unlikely to exceed the 1897.50 bias-up target at 10:15, and then not to renew the 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…
Recall that Friday’s gap up had reacted down to test Thursday’s “lower prior highs” down to 1834.00. Its test held, and the balance of the session trended up relentlessly to test 1860.00.

Overnight action’s new info…
Sunday night’s open gapped up 5 points and had extended to 1890.00 by Monday morning. Its reaction down to 1880.00 was recovered up to 1885.00 at the noon hour Globex close. Monday night’s open rallied again, probing fresh highs up to 1892.75. That, too, reacted down — testing Monday’s reaction lows down to 1878.00, and up to 1885.00.

If, then…
Friday’s buyers had gained traction for their efforts. Sunday night and Monday night’s highs could easily qualify as their reward. But will it hold this morning, let alone extend higher? Holiday trading isn’t often duplicated on its second day, and Friday’s pre-holiday trending is often counter-trend. Nevertheless, not rejecting the interim rally would make higher highs likely, up to 1907.00 and 1920.00 before a new downleg would be credible.

First Trade…
Bias Parameters have been updated from those published at Friday’s close. Exiting the open at 9:45 above 1883.00 would be unlikely to trigger the 1878.50 bias-down signal at 10:15. Exiting the open under 1875.50 would be likely to trigger bias-down. Exiting the open above 1889.25 would be likely to trigger the 1885.00 bias-up signal.