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…
Thursday’s volatility was legendary. Wednesday’s opening gap down to 2046.50 (basis Mar) quickly signaled a rally above 2049.25. The 2068.25 bias-up target was met and held at 10:15, and later extended momentarily to 2071.75. The rally was unlikely to hold because its origin was too shallow. But its 2065.00 sell signal was extremely productive, probing the open’s lows by noon, and extending down through the noon hour to test and retest 2027.00, 45 points off the morning’s high. A late bounce to 2042.75 was retraced back into the afternoon’s range under 2035.00.

Overnight action’s new info…
The late rally’s retracement was recovered and its 2042.75 high held as resistance into Europe’s opens. A probe of fresh highs up to 2046.75 never extended, and ranging around yesterday’s late high back down to 2038.50 is now breaking lower.

If, then…
Quarterly expiration is next Friday, so the front-month rolls forward at this morning’s open from December to March. Their spread is an 8 point discount, meaning that the pivotal 2048.00 basis Dec is now 2040.00 basis Mar. And the likely objective to retesting yesterday’s ~2027.00 lows is 2022.50. Any lower would target 2019.00 and 2014.00 — all so long as 2040.00 isn’t recovered, which could effectively end the decline.

First Trade…
Exiting the open at 9:45 above 2042.75 would be likely to trigger the 2040.75 bias-up signal at 10:15. Exiting the open under 2037.75 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…
Tuesday’s gap down to 2057.50 tried extending. Twice, to 2051.50 and 2050.25, with an interim bounce to 2062.00. And that was just the first hour. A surge into positive territory didn’t extend, but its reaction down was supported by 2057.50. So were subsequent reactions down,interrupted by shallower and shallower probes above 2065.00. The close was testing 2062.00 as support.

Overnight action’s new info…
Overnight action has tried rallying, and declining, but neither is extending. First, a mirror image of Tuesday afternoon’s choppy ranging repeatedly attempted shallow probes above 2065.00. Its reactions back down were repeatedly supported by 2060.00. Until they weren’t. That’s when the last probe higher through Europe’s opens was reversed down 16 points from 2068.50 to 2052.25. A recovery attempt has tested 2062.00 as resistance.

If, then…
Yesterday’s productive selling was isolated to the morning, but the afternoon’s buying gained no traction. These elements create the potential for a recovery, which must be triggered by gapping up. The overnight dip doesn’t preclude a gap up — its reaction is now testing positive territory, and there is plenty of time to extend several more points before the open. But gapping down would be vulnerable to duplicating yesterday morning’s probe of fresh lows.

First Trade…
Exiting the open at 9:45 above 2058.25 would be unlikely to trigger the 2056.75 bias-down signal at 10:15. Exiting the open under 2054.50 would be likely to trigger bias-down. Exiting the open above 2069.50 would be likely to trigger the 2067.50 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 down had extended lower without hesitation, not until fulfilling the 2075.00 minimum corrective target that was required after Friday afternoon’s weak-handed rally. The balance of the morning extended down, too, fulfilling the correction’s penultimate potential to 2065.00. The balance of the session ranged choppily sideways, until a late surge ended the cash session back at 2075.00.

Overnight action’s new info…
The late surge had extended up to 2082.00 through the futures close. The Globex open immediately reversed back down to attack 2069.00. Choppy flat-to-lower ranging went on to attack yesterday’s ~2065.00 lows. And now that is breaking lower to 2062.00.

If, then…
Yesterday’s late surge didn’t require being corrected since its sponsorship was not counter-trend. Correcting anyway could be satisfied at 2073.00 or 2071.00. Dipping deeper overnight is not predictive, not even all the way back down to yesterday’s lows. Already recovering back above 2073.00 or 2071.00 through the open could leverage the extra rejected dip into a much more powerful morning rally. Otherwise, Monday’s correction of Friday afternoon’s rally may instead resume to its ultimate potential target of 2060.00.

First Trade…
Exiting the open at 9:45 under 2071.00 would be likely also to trigger the 2073.25 bias-down signal at 10:15. Exiting the open above 2075.00 would be unlikely to trigger bias-down. Exiting the open at 9:15 already back under 2065.00 would be likely also to exceed the 2066.75 bias-down target at 10:15 to renew the bias-down 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…
Friday’s bullish reaction to the pre-open Employment Situation report had triggered a 7-point surge to attack 2063.00. Its reaction into negative territory at 2046.50 was recovered to greet the open gapping up, extending higher 25 points through the morning to 2069.50. The legs were large, but the structure wasn’t much different than many Fridays, consolidating into the noon hour. Then a Draghi-headline triggered another surge that extended to 2093.00, settling around 2088.00.

Overnight action’s new info…
Flat-to-lower ranging was transformed at Europe’s opens, surging to probe fresh highs at 2095.50. The one surge was retested, but not extended. Ranging there around Friday’s late 2093.00 high is still underway.

If, then…
The timing of Friday’s noon hour rally leg suggests that it was sponsored by weak hands. Extending higher depends upon gapping up by attracting new sponsorship. That’s not yet indicated, not by only probing Friday’s high and ranging around it. So, that leaves Friday afternoon’s rally vulnerable to a correction this morning — if not also to being fully retraced.

First Trade…
Exiting the open at 9:45 above 2095.25 would be likely also to trigger the 2092.50 bias-up signal at 10:15. Exiting the open under 2083.50 would be unlikely to trigger bias-up. Exiting the open under 2078.25 would be likely to trigger the 2080.50 bias-down 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…
Thursday’s pre-open bounce from 2072.00 had attacked 2088.00, but the 2082.00 open was already resuming the overnight slide from 2095.00. It extended down to 2065.00 through the bias timing window, and then to 2056.00 through the noon hour. Oh, and down to 2040.00 through the afternoon bias environment. The final hour didn’t extend down, so the decline did not gain traction.

Overnight action’s new info…
Firming above 2047.50 into Thursday’s close soon tested 2057.50.  Eerily relentless narrow ranging finally broke higher into Europe’s opens. Yesterday’s bias environment high was attacked to within 3 ticks at 2062.75. Sideways ranging quickly resumed, albeit more choppily

If, then…
More overnight excessive optimism ahead of this morning’s Employment Situation report? Wednesday afternoon’s bias environment high was touched overnight before plunging into yesterday’s open. Last night’s bounce to Thursday afternoon’s bias environment high seems to set the same stage. Knee-jerk reactions are likely after the news. But the open must establish some relevant recovery to avoid melting down again into the weekend.

First Trade…
Preliminary indications aren’t considered ahead of Employment Situation reports.