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…
The most bullish aspect to Thursday’s session was that it didn’t extend Wednesday’s negative FOMC reaction. Similarly, the most bearish aspect to Thursday’s session was that it fully retraced the negative reaction. FOMC news had been greeted at 1901.00-1904.00, and its knee-jerk reaction up was reversed down sharply to 1965.00. Rallying overnight enabled Thursday’s opening surge to touch 1902.50. Reacting down to 1966.00 was recovered enough for the afternoon to repeatedly test 1892.00 resistance.

Overnight action’s new info…
Having been inhibited through the afternoon, reaction to AMZN’s post-close earnings miss easily held the afternoon’s 1877.00 low. Surging before midnight pierced Thursday morning’s low up to 1993.25. Its reaction down to 1880.00 was recovered entirely into Europe’s opens, hovering since then just under the highs and supported by the 1893.50 bias-up signal.

If, then…
The 1913.00 potential remains outstanding, and the open is in proximity of fulfilling it quickly. Trending up overnight and well above yesterday’s lows makes fresh highs seem like the product of momentum, but actually it’s a probe above the range’s upper-end. And a lot of momentum has been expended just to get here, so extending into a breakout is difficult. So, fresh highs will be vulnerable to reversing back down, whether upon exiting the open or exiting the morning’s bias environment. Outlasting those windows could at least marginalize sellers for the day, and possibly extend up to 1924.00. Rejecting fresh highs — especially after testing 1913.00 — could extend back down under yesterday’s lows. Downside risk to NOT probing higher high at the open should be moot so long as bias-up is triggered.

First Trade…
Exiting the open at 9:45 under 1887.50 would be unlikely to trigger the 1893.50 bias-up signal at 10:15. Exiting the open above 1901.00 would be likely also to exceed the 1898.50 bias-up target at 10:30 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…
Wednesday’s bias-down environment began lapsing at its 1897.50 bias-down signal, and immediately launched a rally into the noon hour’s 1910.00 high. A pre-FOMC pullback to 1899.50 tried recovering. But its 10-point knee-jerk reaction up was reversed back down to test 1887.50. That soon extended much lower to 1865.00, ranging around 1873.00-1874.75 through the close.

Overnight action’s new info…
Quite the round trip. Holding 1873.00-1874.75 had created bounce potential up to 1982.00, which was fulfilled soon after the Globex open. Its reaction attacked 1966.00, and then rallied through Europe’s opens to attack 1896.00. Dipping from there fell back to 1882.00. And now plunging from there is testing 1873.00-1874.75.

If, then…
Yesterday afternoon’s decline had gained traction that made it likely to extend lower this morning, but we discussed two reasons to anticipate its rejection. Confidence in the rejection depends at least upon recovering 1882.00 and 1887.50, which would put 1913.00 back in-play. But fulfilling yesterday’s late 1882.00 bounce has allowed another downleg to 1859.50… and that has become likelier with the drop back to 1873.00-1874.75.

First Trade…
Exiting the open at 9:45 under 1874.75 would be unlikely to trigger the 1882.00 bias-up signal at 10:15. Exiting the open above 1885.00 would be likely 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…
Gapping up to 1881.00 had extended higher through the noon hour to attack 1900.00. That was pessimistically short of Friday’s prior highs. Dipping to 1888.00 was recovered only to 1897.25 before the close, and only momentarily as 1888.00 was retraced through the futures close… before AAPL’s earnings.

Overnight action’s new info…
Reaction to AAPL’s earnings triggered a gap down to 1885.00 that extended immediately to attack 1881.00. Price action since then has ranged choppily sideways — testing 1890.00 above and 1879.00 below —  all centered around 1885.00. Currently a bounce is testing 1887.50.

If, then…
With no trending effort having been made yesterday afternoon, it’s not surprising that no traction was gained either way. So, gapping open beyond the afternoon’s range can be the only way to launch trending for the morning. Both gapping open AND extending through the open. Gapping but NOT extending would more likely return into the range. That setup can at least resemble trending, attracting price back to yesterday’s highs. Trending beyond the range this morning is more difficult with this afternoon’s FOMC policy statement looming ahead.

First Trade…
Exiting the open at 9:45 under 1885.00 would be likely to trigger the 1887.50 bias-down signal. Exiting the open above 1892.00 would be unlikely to trigger bias-down.

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…
Bouncing 13 points into and out of Monday’s noon hour peaked at 1895.00. But the bias environment exit was attacking the morning’s 1882.00 low. Plunging from there tested 1868.00 into the close, bouncing momentarily to attack 1874.00.

Overnight action’s new info…
The decline tried resuming overnight, dipping to 1868.00 and then recovering up to 1872.75. Then it really resumed, dipping to fresh lows. And lower. Greeting Europe’s opens at 1856.00 reacted down even further to attack 1851.00, which was soon recovered. And now so has the entire overnight drop, as a fresh high is attacking 1880.00.

If, then…
Gaining traction for its effort Monday afternoon entitled the decline to lower lows this morning. This setup can invert if already rewarded overnight. Meanwhile, anything more substantial than an isolated test of 1856.00 would have suggested the corrective rally ended already. Yesterday’s decline was rewarded already. Now the test of 1856.00 can be isolated by exiting the overnight timing window back in positive territory. Then the recovery’s risk is at 1880.25-1881.00. Strong-handed buyers would either quickly exceed it. or else delay its test patiently. Weak-handed sponsorship would test it quickly before reversing down to duplicate the overnight drop to some degree.

First Trade…
Exiting the open at 9:45 under 1873.00would be unlikely to trigger the 1876.50 bias-up signal at 10:15. Exiting the open aove 1880.25 would be likely to trigger bias-up.

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

CHARTROOM LINK <<==click here
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
Gapping up 31 points Thursday to 1892.00 was essentially Friday’s midpoint, as the balance of the session fluctuated relatively narrowly up to 1900.00 and back down to 1884.00, then back up again.

Overnight action’s new info…
Friday’s sideways ranging has resumed, albeit narrower. since Sunday night’s blip-up momentarily tested 1904.00. That was reversed into a narrowing range back around 1900.00, which broke lower into and out of Europe’s opens fell to 1887.50. Reacting back up is testing to 1900.00 as resistance has kept the range narrow, but not so much calm as paralyzed by anxiousness.

If, then…
Today’s only econ report has no track record for influencing price action, but ECB head Draghi speaking today should have an impact. Not already gapping down under Friday’s lows at Monday’s open makes the rally likely to extend another 15-20 points higher.

First Trade…
Exiting the open at 9:45 above 1905.00 would be likely to trigger the 1902.00 bias-up signal at 10:15. Exiting the open under 1896.00 would be unlikely to trigger bias-up. Exiting the open under 1886.00 would be likely to trigger the 1892.00 bias-down signal.