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…
Surging into greeted Tuesday’s open too optimistic after forming a Rising Wedge minutes earlier. The reaction down from 2024.00 to 2010.50 still triggered bias-up. The balance of the session trended back up to the pre-open high, and higher. Outside potential to the 2035.00 area triggered a 9-point reaction down that recovered to 2031.00 at the cash session close, and 2036.50 at the futures close. Buyers gained traction for their efforts.

Overnight action’s new info…
Dipping shallowly back to 2031.00 waited until Europe’s opens before resuming the rally. Trending up since then has extended to 2045.50.

If, then…
Gaining traction through yesterday afternoon’s checkpoints should reward buyers by also probing higher during this morning’s bias environment. That can be inverted if overnight action has already been rewarding. That’s determined by whether the open holds the test of a relevant resistance — be it calculable like the 2043.00 bias-up target, or structural like 2046.75 that was the last relative high, or that last relative high’s 2038.50 prior low. Seasonal bullishness is helpful to extend a rally, but extending it too quickly can eventually be helpful to attracting shorts.

First Trade…
Exiting the open at 9:45 above 2046.00 would be likely to renew the bias-up signal by exceeding the 2043.00 bias-up target at 10:15. Exiting the open at 9:45 above 2038.50 would be likely to trigger the 2035.00 bias-up signal 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…
Monday’s gap up returned to the 2013.75 overnight high after having dipped pre-open to 2006.00-2007.00. The opening strength didn’t extend, and eventually capitulated back under 1996.00. That essentially filled the gap back down to Friday’s close, and essentially fulfilled the bearish WedEX. The noon hour’s bounce up to 2006.00-2007.00 was retraced back toward the low, and then recovered again into the close.

Overnight action’s new info…
The close’s recovery of 2006.00-2007.00 had extended 5 more points into the cash session close and 10 points by the 2016.00 futures close. That eventually extended to 2023.25 overnight, until Europe’s opens triggered a dive attacking 2006.00-2007.00. Now that is being recovered to 2020.00.

If, then…
Yesterday’s late surge was targeting 2006.00-2007.00. Extending through it to whatever degree, even by 15-16 points to 2023.00, didn’t prevent dipping back down overnight to 2006.00-2007.00. Breaking under it would reinstate the retest of Friday’s 1991.00 low. That window remains open, but probably not past this morning as seasonal influences start inhibiting trending — if they haven’t already begun.

First Trade…
Exiting the open at 9:45 under 2006.00 would be likely also to trigger the 2007.00 bias-down signal at 10:15. Exiting the open above 2012.00 would be unlikely to trigger bias-down. Exiting the open at 9:45 above 2018.00 would be likely to trigger the 2015.00 bias-up signal 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…
Already down substantially to 2032.00 and 2025.00 through Thursday’s cash session and futures closes, Thursday night’s flat-to-lower ranging down to 2012.00  greeted Friday’s Quadruple Expiration open well off of Thursday’s 2073.00 highs. The session trended down to 1994.00 and 1991.00 through the cash session and futures closes. WedEX had inverted to bearish.

Overnight action’s new info…
Gapping up Sunday night to 1997.00-2001.00 ranged choppily flight-to-higher through Europe’s opens.  A surge testing 2012.00 and attack on 2014.00 each were interrupted by dipping to 2009.00. Now another bounce attacking 2012.00 has formed a Head & Shoulders reversal pattern — just now breaking lower.

If, then…
Gapping up and trending up overnight — Is follow-through from Friday’s plunge hereby avoided? Three things to consider. 1) WedEX influences Friday afternoon and Monday morning, but not the period between them. Gapping up would still be vulnerable to trending down throughout the morning. That downtrending can bottom upon filling the gap back to Friday’s close when the bias environment begins lapsing. 2) Trending down into Friday’s close can be rejected by gapping up above Friday afternoon’s 2014.25 high to form a “session-long rally” setup. That would invalidate the WedEX. By the same token, rallying to the brink of session-long rally but not triggering would be as bearish as the setup would have been bullish. And 3) exiting the weekend with extreme sentiment like gapping sharply is often a sentiment extreme… So, a morning-long drop back down to Friday’s lows is still likely, but that could form a durable bottom.

First Trade…
Exiting the open at 9:45 under 2012.00 would be unlikely to exceed the 2014.75 bias-up target at 10:15, or to renew the bias-up signal. Exiting the open at 9:45 above 2007.75 would be likely to trigger the 2005.25 bias-up signal at 10:15. Exiting the open under 2004.50 would be unlikely to trigger bias-up.

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…
Well, that’s interesting. The inverted morning-long rally signal had scared away buyers ahead of expiration. Through yesterday afternoon’s no-bias environment, the market had been ranging choppily sideways between the morning’s 2038.50 low and the afternoon’s 2050.50 bias-up signal. Pent-up buying pressure could have begun breaking higher within 10-15 minutes of the 2:30 bias environment exit but didn’t (which is when I had to leave early). The exit, itself, was drifting lower, so a rally was unlikely. Even the 3:37-3:52 position-squaring window drifted. Then the last 5 minutes plunged to end the cash session at 2032.00.

Overnight action’s new info…
Thursday’s closing plunge barely paused until attacking 2022.00 through the Globex open. That extended to 2015.50 and then lower to 2012.00 — after an interim attack on 2030.00 triggered by the Yen’s overnight head-fake. The 2012.00 low is being retested now.

If, then…
Today’s bullish WedEX couldn’t ask for much more. So little more*, that not fulfilling it could be due to a massive afternoon meltdown. WedEX influences Friday afternoon and Monday morning. If Thursday morning’s slide helped to discount recent gains from expiration jockeying, then the overnight slide should be a windfall to the bullish WedEX driving price higher into and out of the weekend… *That “little more” which a bullish WedEX would still want for a Friday afternoon rally is lack of Friday morning follow-through. Lower highs centered around 2012.00 at 2008.00-2014.50 represent “lower prior highs” of the Fri-Mon Island that had required a retest. Exiting the morning’s bias environment back above that range would start to signal that sellers likely absorbed. Already rallying through the morning would not steal any energy from the bullish WedEX. However, trending down through the morning could invert the WedEX to bearish. And all that that entails.

First Trade…
Exiting the open at 9:45 under 2012.00 would be likely also to trigger the 2015.25 bias-down signal at 10:15. Exiting the open above 2020.50 would be unlikely to trigger bias-down. Exiting above 2030.00 would be likely to trigger the 2027.00 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…
Wednesday’s open maintained a gap up above Tuesday’s highs, after Tuesday’s buyers had failed to gain traction for their efforts. This setup didn’t require extending higher immediately, but at least eventually. So, after reacting down from 2052.00 resistance to await the FOMC from unchanged, the rally resumed up to 2068.75. Buyers barely gained traction, and a bullish WedEX triggered.

Overnight action’s new info…
Backing-and-filling down to 2056.00 greeted Europe’s opens back at 2062.50. That firming became a rally to fresh highs attacking 2073.00. That’s now reacting down to test this morning’s 2069.25 bias-up signal as support.

If, then…
Trending higher this morning is likely since yesterday afternoon’s buyers gained traction for the day’s efforts. Gapping up is at risk of prematurely fulfilling the signal and inverting it, but that risk lasts only through the open. Regardless, not gapping down avoids inverting the bullish WedEX signal.

First Trade…
Exiting the open at 9:45 above 2070.50 would be likely also to trigger the 2069.25 bias-up signal at 10:15. Exiting the open under 2064.75 would be unlikely to trigger bias-up.