The First Trade

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

CHARTROOM LINK(s)
o Win XP-Friendly entry
o non-xp friendly (ilinc)
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
Tuesday afternoon’s buyers had gained traction for their efforts. Gapping down Wednesday back to Tuesday’s 2065.00 noon hour lows was on the borderline of negating that traction. Quickly fulfilling the morning’s 2061.50 bias-down target held through the day, but never launched a recovery. The last half-hour exploited that delay by plunging 10 points to 2053.50. Its reaction up attacked 2060.00 before trending back down toward the plunge’s low.

Overnight action’s new info…
The plunge’s consolidation has persisted, narrowing its range between 2054.00-2058.00. The plunge’s low hasn’t been touched (that’s basis ES, while SP had only plunged to 2054.50). The resulting overnight pattern has formed a massive Symmetrical Triangle.

If, then…
Any influence by overnight patterns on intraday action will be obvious through the opening 15 minutes of volatility, if at all. So, if the overnight Symmetrical Triangle intends to resolve as the pattern often does (i.e. break falsely in one direction before reversing more substantially in the opposite direction), then that reversal must be underway by 9:45. Otherwise, already breaking in one direction would be less likely to reverse direction this morning. So, maintaining a break into and out of the open — whether higher, or lower — would be credible for extending in that direction intraday. Reversing a break would be likely to extend if the reversal were maintained through 9:45. And although today’s volume is relatively heavy for a pre-holiday weekend, it’s not necessarily liquid, and a one-sided market could trend relentlessly into the afternoon if given the right shove.

First Trade…
Exiting the open at 9:45 above 2058.00 would be unlikely to trigger the 2052.00 bias-down signal at 10:15. Exiting the open above 2062.50 would be likely to trigger the 2061.00 bias-up signal.

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

CHARTROOM LINK(s)
o Win XP-Friendly entry
o non-xp friendly (ilinc)
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
Surging out of a gap up quickly found a momentum peak Tuesday morning at 2069.00. The noon hour’s exit resumed rallying into the final hour up to 2074.50. The rally gained traction by the bias environment exit and final hour’s entry. The balance of the session ranged sideways, even dipping momentarily to touch the morning’s 2069.00 high as support.

Overnight action’s new info…
Tuesday’s high was pierced by 2-3 ticks while waiting for Europe’s opens. That wasn’t helpful. A 5-point slide quickly tested 2067.00, and price has been ranging around yesterday morning’s 2069.00 high.

If, then…
Tuesday’s traction should be rewarded by probing higher Wednesday morning. That can be delayed until the afternoon if a shallowly weak open isn’t soon recovered — and currently the open is indicated to be shallowly weak. Deteriorating much more would threaten yesterday’s 2065.00 noon hour low, and gapping much lower could offset Tuesday’s upside traction. Although tomorrow’s volume will be relatively strong for a three-day holiday weekend, trending this afternoon would be difficult to stop, regardless of whether it is up or down.

First Trade…
Exiting the open at 9:45 under 2065.00 would be likely to trigger the 2068.00 bias-down signal at 10:15. Exiting the open above 2070.50 would be unlikely to trigger bias-down.

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

CHARTROOM LINK(s)
o Win XP-Friendly entry
o non-xp friendly (ilinc)
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
My, how quickly times change. The holiday break ended yesterday by trending down Sunday night from 2052.00 to almost 2040.00. Monday’s open was greeted by a bounce attacking the morning’s 2047.00 bias-down signal as resistance. It was too shallow to reverse the overnight trending, but high enough to refuel sellers. The drop extended through the morning to attack 2035.00. The balance of the session trended back up to close above the morning’s high, but too late and by too little to assure trending higher.

Overnight action’s new info…
Not signaling a trend reversal doesn’t prevent it. Firming to test 2051.00 and then 2052.00 retested Thursday’s close. Europe’s opens triggered a surge touching Thursday’s 2059.75 high. Now a pullback is attacking 2055.00.

If, then…
Cleanly recovering yesterday morning’s high through the close would have targeted the interim decline’s origin, which is Thursday’s high. Testing an objective not yet put it into-play can be more difficult to extend through it. Yesterday’s recovery attempt didn’t gain traction for its effort, so maintaining a gap up would be entirely credible for extending higher intraday.

First Trade…
Exiting the open at 9:45 above 2054.25 would be likely to trigger the 2050.50 bias-up signal at 10:15. Exiting the open above 2059.00 would be likely to renew the bias-up signal by also exceeding the 2056.25 bias-up target through 10:15.

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

CHARTROOM LINK(s)
o Win XP-Friendly entry
o non-xp friendly (ilinc)
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
Christmas Eve’s early close spent the morning ranging choppily sideways under Wednesday’s 2057.50 highs. Breaking higher into the noon hour attacked 2060.00. The last half-hour plunged to probe under the morning’s 2050.50 low.

Overnight action’s new info…
Sunday night’s open surged briefly to 2054.50, and then began retracing entirely back down to 2050.50. And through it, recently probing fresh lows down to 2043.25.

If, then…
Exiting the weekend with extreme sentiment is often a sentiment extreme. Monday’s open is indicated currently beyond the prior session’s range, attacking Wednesday morning’s lows. Probing today back above Thursday’s will be difficult without opening back above Thursday’s 2051.50 low. Meanwhile, trending down this morning would be difficult if the bias-down signal isn’t renewed under 2041.50.

First Trade…
Exiting the open at 9:45 under 2045.50 would be likely to trigger the 2047.00 bias-down signal at 10:15. Exiting the open under 2038.00 would be likely to renew the bias-down signal by not recovering the 2041.50 bias-down target at 10:15.

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

CHARTROOM LINK(s)
o Win XP-Friendly entry
o non-xp friendly (ilinc)
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
Wednesday’s gap up to its 2043.00 bias-up target wasn’t being rejected, so the morning rallied as reward for Tuesday afternoon’s buyers having gained traction up to 2035.00. And then it kept rallying. The next likely objective of 2053.00 was met during the noon hour, and the potential to 2058.00-2060.00 was attacked to within 1 tick while the bias environment was lapsing. A late reaction down targeting 2051.25 stopped 1 tick short. Buyers gained traction for their efforts again, and left outstanding overbought RSIs.

Overnight action’s new info…
Sellers stopped short on the drop into Wednesday’s close. They’ve been thrown another bone overnight, but didn’t hold on to it, either. Globex had initially bounced up to 2056.50, and then sank to touch what is this morning’s 2049.00 bias-down signal. Now that has been recovered to test 2054.00, unchanged from yesterday’s futures close.

If, then…
Today’s session closes early. Trending is never more difficult except for Saturdays and Sundays. And that’s without even indicating a gap. A dry cleaners gift-shopping morning? Fading the extremes may be easier than trying to position at the range’s midpoint. Somehow gapping under yesterday afternoon’s 2048.00 low could form a session-long decline, or just the opposite if the gap down were not maintained or extended through the open. Yesterday’s traction suggests a reward due by probing fresh highs this morning, but not necessarily effortlessly like yesterday — and not necessarily durable.

First Trade…
Exiting the open at 9:45 under 2048.00 would be likely to trigger the 2049.00 bias-down signal at 10:15. Exiting the open above 2053.00 would be unlikely to trigger bias-down.