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…
The Turkey-Russia event triggered a gap down Tuesday to 2071.00, which soon extended back down to within 6 ticks of the 2065.50 overnight lows. Despite the seasonal timing that allowed more time to decline, the selling was limited to the morning’s bias environment. It was reversed through the noon hour back into positive territory up to 2091.00. The balance of the session ranged sideways back down to 2084.00.

Overnight action’s new info…
A late-afternoon sell signal triggered under 2087.50 had targeted at least 2082.50. Meeting it early overnight held, as did its retest. The second reaction up extended to probe above yesterday’s highs to 2092.50. That has dipped back down to test 2088.00.

If, then…
Yesterday morning’s deep pullback was optimistically brief, so it may be too soon for a rally attempt to be credible. Retesting yesterday’s lows may be unlikely, but that depth isn’t required to remain in corrective mode. The pattern remains vulnerable to spending the day backing-and-filling, trading flat-to-lower, and not trending higher. That said, trending higher from gapping up would get a benefit of the doubt for extending on volume too low to attract counter-trend sponsorship.

First Trade…
Exiting the open at 9:45 above 2091.00 would be likely to trigger the 2088.00 bias-up signal at 10:15. Exiting the open under 2084.50 would be unlikely to trigger the 2088.00 bias-up signal. Exiting the open under 2077.00 would be likely to trigger the 2079.75 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)
[Thanks to all who helped test the new room last night ! ]
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
Flat-to-higher up to 2093.00 Monday morning didn’t extend the bearish WedEX influence. But an offsetting test of the morning’s 2082.50 bias-down signal was put into play. That applied also to the afternoon, which plunged to 2081.25 during it no-bias environment. A retracement back to the 2088.00 bias-down signal became “unfinished business above.”

Overnight action’s new info…
Bouncing to within 3 ticks of 2088.00 neutralized its attraction. Coinciding within minutes was news of a Turkish missile coinciding with a Russian jet fighter. Both were direct hits, triggering a 1-hour, 20-point plunge down to 2066.50. The last 61.8% dropped at an exponential pace from 2079.00, and has been retraced. Price action since then has ranged choppily sideways down to 2073.00.

If, then…
Was reaction to the Russian jet downing exacerbated by coinciding with two other influences? First, the market had become vulnerable already to a correction. Last week’s test of 2068.00 up to the 2082.50 prior high had opened the door to a correction. This weekend’s Saturday Review described the pre-holiday window where a correction must occur if it were going to occur at all. And yesterday’s post-market Wrap described the four consecutive sessions of probing above 2082.50 that never actually broke its resistance. Also exacerbating the market’s reaction was the news coinciding with Europe’s opens. That was a direct hit. But even if the overnight drop was exacerbated, immediately reversing the direction back up isn’t assured. Remember that bullish holiday seasonality doesn’t begin before this afternoon. Although the 2065.50 overnight low need not be retested before resuming the rally, its gravitational pull remains intact until recovering back above yesterday’s lows.

First Trade…
Exiting the open at 9:45 above 2082.50 would be unlikely to trigger the 2080.50 bias-down signal at 10:15. Exiting the open under 2077.75 would be likely to trigger the 2080.50 bias-down signal. Exiting the open under 2070.50 would be likely also not to recover the 2074.75 bias-down target by 10:15 and 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…
Gapping up Friday to 2088.00 and extending higher through the first hour to 2094.50 retested Wednesday night’s 2089.25 high. It also fulfilled the morning’s bias-up target. The balance of the session trended back down shallowly to enter the final hour testing 2082.00. The final hour firmed back up to 20887.00-2088.00 into the close.

Overnight action’s new info…
Sunday night open surged up to 2092.50. Then almost all of Friday’s late bounce was retraced back down to 2082.00. Crude Oil had been probing fresh lows, too, but surged on news that Saudi Arabia would defend it — that triggered a surge in ES, momentarily probing into positive territory attacking 2091.00.

If, then…
If the bearish WedEX is at all influential Friday afternoon, then it should be very influential Monday morning, following the downward drift with an aggressive slide. Not sliding through the open would significantly undermine that bearish influence, and possibly point higher for the day — if not also for the week. Potentially bullish holiday seasonality ahead of Thursday’s Thanksgiving closure suggests that any downdraft this week must run its course by Tuesday’s close.

First Trade…
CORRECTION: Exiting the open at 9:45 above 2085.00 would be less likely to trigger the 2082.50 bias-down signal at 10:15. Exiting the open under 2079.00 would be likely 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…
Wednesday night had extended Tuesday’s rally by probing above the 2082.50 intraday high up to 2089.25. That was retraced entirely before the open, but never actually reversed down — that is, Thursday’s entire session ranged choppily around Wednesday’s 2080.50 close, between 2075.50-2083.50. Having held a test of the morning’s bias-up signal, an offsetting test of its 2072.00 bias-down signal was put into play, not invalidated, and left outstanding.

Overnight action’s new info…
Thursday night’s weak open didn’t extend down, and instead firmed. That eventually became an aggressive surge attacking 2086.00 into Europe’s opens. Perhaps that was a little too aggressive, as it was retraced entirely back down to Thursday’s 2078.00 cash session close. Too aggressive, or perhaps only too early, as all but 1 tick of the surge has been recovered.

If, then…
Yesterday’s weak open helped to confirm that Thursday’s close had held prior highs, and did not break them. WedEX’s afternoon influence is passively bearish, so while momentum may have peaked, intraday noise can still probe higher temporarily. Whether attacking Thursday night’s high up to 2088.00, or probing it up to 2092.00, sliding or drifting lower into the weekend is likely. An exception would be for the signal to invert, which would begin by gapping open beyond a prior extreme — I’ll update on that later this morning.

First Trade…
Exiting the open at 9:45 above 2088.00 would be likely also to trigger the 2084.50 bias-up signal at 10:15. Exiting the open under 2080.50 would be less likely 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…
Wednesday’s 2056.00 open was greeted back where Tuesday afternoon’s German soccer match threat had triggered a decline down to 2041.50. The balance of the morning trended up to probe Tuesday’s 2063.50 high. Reaction to the afternoon’s FOMC Minutes doubled the morning’s gain, testing 2082.50 where the prior week’s consolidation had peaked.  Buyers gained traction although they were largely rewarded by the close.

Overnight action’s new info…
A shallow pullback to 2078.00 soon resolved up to fresh highs at 2085.00. That has extended to test 2089.00.

If, then…
Wednesday’s WedEX was testing a prior high, instead of exceeding it or rejecting it. Thursday’s open can serve by proxy, and maintaining a gap up would be bullish for Friday afternoon. In the interim, the rally gained traction Wednesday afternoon, and a gap up is indicated, so not rejecting it could extending higher before noon. Otherwise, the rally since Sunday night and Tuesday afternoon does allow room for inverting down without reversing the uptrend.

First Trade…
Exiting the open at 9:45 above 2089.25 would be likely also to exceed the 2088.00 bias-up target through 10:15 to renew the bias-up signal. Exiting the open above 2085.75 would be likely to trigger the 2082.75 bias-up signal at 10:15. Exiting the open under 2079.00 would be unlikely to trigger bias-up.