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…
Plunging overnight to probe the 1805.00 3-week old lows by 3 points had reversed up partially through Thursday’s open to attack 1834.50 to within 1 point. The balance of the bias environment was spent falling back down toward the lows at 1807.50. A modest (relatively) bounce to 1822.00 was retraced to 1805.00 at the afternoon’s bias environment exit, a virtual air pocket below it. Oil suddenly surged and so the break was reversed up to 1834.50 before the close.

Overnight action’s new info…
Probing slightly higher to 1837.00 was quickly reversed back down to attack 1822.00. Already recovering into Europe’s opens, higher highs have now extended up to 1847.50.

If, then…
Yesterday’s late recovery had initially stopped pessimistically short of touching the morning’s high, which suggested its actual recovery would almost literally explode higher on the way to at least 1850.00. It didn’t, which was more pessimism (potentially bullish from a contrarian perspective) but sellers retained control. Even if the overnight extension were to touch 1850.00, sellers can retain control if post-open action doesn’t still extend higher. Yesterday’s late break lower was victim of the impending weekend illiquidity — 3-day weekend, no less — that makes sponsorship vulnerable. Gapping up is itself always vulnerable, too.

First Trade…
Exiting the open at 9:45 above 1845.50 would be unlikely to reverse back under the 1841.25 bias-up target through 10:15, and likely to renew the bias-up signal next targeting 1850.25. Exiting the open under 1838.00 would be unlikely to exceed the bias-up target long enough to renew the bias-up signal. Exiting the opeen under 1829.25 would be unlikely to trigger the 1834.50 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…
Gapping up and extending higher Wednesday attacked 1877.00 during the morning bias environment’s surge. Crude Oil had inspired that move, despite having put new lows into play. Both returned their gains, and matched their steep surges as fresh session lows were probed. Selling did not extend until the latest opportunity, not optimal but still credible for gaining traction to fulfill its 1848.00 potential down to 1843.50. No unfinished business above was left outstanding.

Overnight action’s new info…
There was barely any hesitation in extending down to 1832.00 well before midnight. But ranging back up to 1840.00 didn’t break until Europe’s opens. And it broke lower, sharply, first to 1809.00 which was consolidated up to 1817.00. A spike down to 1802.50 snapped back up quickly to 1818.50.

If, then…
Breaking under the morning’s lows so late yesterday had prevented the move from signaling the decline has resumed. Yet, a 44-point overnight slide just retested the 3-week old 1805.00 lows. Extending down overnight sharply and relentlessly to whatever degree is more difficult to extend post-open. By the same token, extending that overnight drop post-open — under a relevant support and through a relevant timing window — can produce a multiple of the overnight slide.

First Trade…
Exiting the open at 9:45 through 1807.00 would be unlikely to extend down this morning, whether by absorbing a retest of the low or simply by rallying back up to the 1834.50 bias-down target — with potential up 1850.00. Not recovering by 9:45 from probing back under 1807.00 would be likelier to trend down through the morning.

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 retracing Monday’s late rally before Tuesday’s close, the attraction below had been neutralized. It was a pretty big rally, and so a big retracement. And there were many other big rallies and retracements throughout the day. The last rally was big, and gained a little traction, but it was retraced just enough to close back within the day’s wide range — leaving overbought RSIs outstanding at its 1863.75 high.

Overnight action’s new info…
Room for extending the Tuesday’s late pullback to 1840.00 was exploited down to 1838,50. Twice. Already rallying into Europe’s opens, only a blip-down had to be absorbed before surging to 1870.50. the surge is being consolidated back down to 1864.50

If, then…
The next higher objective put into play yesterday afternoon was a test of Friday afternoon’s 1868.00 “higher prior lows.” Done. The only challenge now is the same challenge as at yesterday’s open — already having fulfilled its upside attraction. The gap back to Friday’s 1873.25 and 1875,50 closes could be filled, too. It’s not required, but the potential may be enough to encourage extending the rally to test 1881.00 and 1888.00. Fed Chair Yellen’s congressional testimony may also be a challenge, or an accomplice.

First Trade…
Exiting the open at 9:45 back under 1856.50 would be unlikely to exceed the 1861.25 bias-up target at 10:15. Bias signals are otherwise well out of range currently.

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…
Once again, gapping down to new relative lows, and trending down sharply intraday to 1821.75, were somewhat rescued by an afternoon surge back through the open’s highs. Monday afternoon’s rally started too late to be the product of strong hands, and negative territory was maintained, but overbought RSIs were left outstanding at the 1855.00 high.

Overnight action’s new info…
Monday’s closing dip to 1844.00 was retraced almost entirely into the futures close. Then it was extended much deeper overnight to 1832.00. Surging into and out of Europe’s open’s attacked Monday’s late 1855.00 high, and later probed it up to this morning’s 1856.50 bias-up signal.. Both reacted down to test 1840.00, currently down to 1837.50.

If, then…
Buyers didn’t gain traction for yesterday afternoon’s late rally, so extending higher this morning all but requires gapping up. The complete recovery overnight reflects an ability to extend higher, so probing higher without gapping up is possible — especially if opening above 1846.00 — albeit doomed to later reversal. Trending down through the open would target a retest of yesterday’s lows, and possibly resume the decline.

First Trade…
Exiting the open at 9:45 1854.00 would be likely to trigger the 1850.75 bias-up signal at 10:15. Exiting the open under 1846.00 would be unlikely to trigger bias-up. Exiting the open under 1836.75 would be likely to trigger the 1840.00 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…
Gapping down 9 points from 1910.00 in reaction to Friday’s pre-open Employment Situation report only worsened throughout the day. The net effect was to revisit the recent range’s lower-end around 1865.00. Only one week earlier, probing above the same range’s upper-end had triggered a breakout, which wasn’t confirmed on Monday. Sellers gained no traction for their effort, despite the afternoon probing fresh session lows.

Overnight action’s new info…
Sunday night’s firm open extended higher to attack 1884.00. Dropping to 1877.00 was recovered to probe 1884.00, only to drop back down to 1877.00. One more bounce was the final bounce, suddenly plunging 39 points to attack 1845.00.

If, then…
Stopping optimistically shot of prior lows Friday didn’t resolve down immediately. Gapping down may not extend immediately. If The earlier hesitation and the overnight bounce suggest that gapping down could attract more optimism. The next lower relevant support is at 1849.00, now being tested, and its disposition through the open could define the morning’s trend.

First Trade…
Exiting the open at 9:45 above 1856.50 would be likely also to test the 1862.75 bias-down target as resistance. Exiting the open under 1848.00 would be likely to extend down through the bias environment.