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…
Fresh lows were probed through the noon hour down to 2051.25. The afternoon bias environment firmed back up to 2057.00, and then to 2060.00 into the cash session close. That was still in negative territory, and under the morning’s higher highs at 2061.00 and 2063.75.

Overnight action’s new info…
Surging through the futures close did probe the morning’s high by 1 point up to 2064.75. But the post-close surge was rejected the Globex open which gapped down and retraced the cash session close down to 2059.50. That rejection was limited, and recovered, soon probing even higher to 2065.50. Now higher highs are probing another point higher to 2066.50.

If, then…
Tuesday morning’s bounce already filled the gap back to Monday’s 2063.50 close. Since that resolved in a lower low, there’s no bearish reason to revisit that gap intraday. So, maintaining the overnight gains through the open — especially if begun by gapping up through 2066.00 — could trend up sharply this morning, before becoming paralyzed by anxiousness ahead of the afternoon’s FOMC policy statement. Not maintaining the overnight recovery could resolve back down through yesterday’s lows and also probe under 2048.00.

First Trade…
Exiting the open at 9:45 above 2066.00 would be likely also to trigger the 2065.00 bias-up signal at 10:15. Exiting the open under 2061.00 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…
Following Sunday night’s “inside day,” opening Monday in the middle of Friday’s non-trending range made intraday trending unlikely. In fact, Monday was an inside day, too. It left outstanding the morning’s 2058.50 bias-down target that had been triggered and not invalidated.

Overnight action’s new info…
Gradual weakness eventually slid sharply to probe Monday’s 2058.50 unfinished business, down to 2056.75. A choppy range has formed there back up to 2062.00.

If, then…
Last night’s action has probed under Monday’s low to barely touch Friday’s low. Not quickly rejecting one test then tends to proceed to the next such attraction. So, isolating the tests to overnight action can avoid retesting Friday’s low intraday, by already probing a prior high above 2066.00 into Tuesday’s open. Otherwise, Friday’s low isn’t obligated to offer much support if tested, and would likelier be probed down to Thursday’s “lower prior highs” under 2049.00.

First Trade…
Exiting the open at 9:45 under 2057.00 would be likely also to trigger the 2058.50 bias-down signal at 10:15. Exiting the open under 2052.00 would be unlikely to recover the 2053.50 bias-down target at 10:15 and renew the bias-down signal. Exiting the open above 2066.00 would be unlikely to trigger bias-down.

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

CHARTROOM LINK(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 firming after Thursday’s session-long rally, surging in reaction to China’s rate cuts created a peak at 2074.75. Reacting back down to 2056.75 bottomed when the morning’s bias environment began lapsing. That was still above Thursday’s highs. Rallying into the final hour attacked the pre-open high up to 2073.50..

Overnight action’s new info…
Friday last hour had softened into and out of the close to 2066.00. The deterioration resumed at Sunday night’s open, drifting down to 2061.00. A dip down to 2057.50 has reacted back up to 2064.00.

If, then…
Friday confirmed Thursday’s breakout. At least an eventual third higher close is required. Reversing down immediately — as overnight action suggests is the intent — would be considered only a temporary correction. None of which may prove relevant today, since overnight weakness so far has been contained within Friday’s range as only noise.

First Trade…
Exiting the open at 9:45 above 2069.00 would be unlikely to trigger the 2063.50 bias-down signal at 10:15. Exiting the open under 2059.75 would be likely to trigger bias-down. Exiting the open under 2055.50 would be unlikely to recover the 2058.50 bias-down target by 10:15, which would 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…
Thursday’s gap up above the prior afternoon’s high immediately rejected that prior session’s downtrending close. And that’s the recipe for a “session-long rally,” which proceeded to rally sharply. Finally closing beyond the range around 2019.50 put into play the next higher objective at 2055.00. Buyers didn’t gain traction for their efforts, and oversold RSIs at the afternoon’s 2034.50 low require a retest..

Overnight action’s new info…
Extending higher into and out of the close quickly fulfilled the next higher 2055.00 objective. Spiking up at the Globex open quickly came within 1 tick of 2062.00. Then price began shifting lower, all the way through Europe’s opens, albeit at a shallow slope that bottomed above yesterday’s highs at 2053.25. Then the initial overnight high was probed by 1 point up to 2063.25… Oh, and then China cut its interest rates and its reserve requirements ratio, triggering a spike up to 2074.25.

If, then…
Session-long setups tend to extend into the following morning. Done. And since Thursday afternoon’s buyers didn’t gain traction, gapping up is the only way to maintain the uptrend. Done… or overdone? Friday’s are different animals due to the impending weekend illiquidity. That make us into different animals as it shifts our focus, or dilutes it. So does 57 points in 24 hours, after already having rallied considerably. Closing above 2055.00 would put into play 2088.00, and gapping up would leave unfinished business above if post-open action were to reverse down — none of which prevents trending back down this morning back to yesterday’s highs. Today more than usual, the opening 15 minutes will be very revealing.

First Trade…
Exiting the open at 9:45 above 2057.50 would be likely also to exceed the 2056.00 bias-up target at 10:15 to renew the bias-up signal. That doesn’t seem very relevant at the moment ;)

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 night’s retest of Monday’s 2031.50 high had quickly peaked and reversed down on the way to 2020.50. A pre-open retest of 2031.50 wasn’t rejected immediately, but much more substantially. The open’s drop found support upon testing 2020.50 but its next test slid to 2013.00. Fresh lows into and out of the close slid to 2007.50.

Overnight action’s new info…
Optimism and apprehension? Firming early back up to the 2017.00 area peaked by midnight. With the ECB rate decision and Draghi speaking, price action since then has only ranged sideways back to 2012.50.

If, then…
The pattern since last Thursday afternoon’s 30-point rally to 2019.50 had only ranged sideways through Tuesday’s close, albeit biased upward. Tuesday night’s surge to 2034.25 was a fresh high for the range, and Wednesday afternoon’s 2007.50 was a fresh low for the range. Much of the selling was probably defensive posturing ahead of this morning’s ECB/Draghi events. So, was it prescient that the events would spur even more dramatic selling, or has that been discounted so much that a rally back to the upper-end comes next? We’ll know a lot more very soon. But a path back to the highs is still possible if the open isn’t already duplicating yesterday’s slides.

First Trade…
Exiting the open at 9:45 above 2016.50 would be likely also to trigger the 2013.75 bias-up signal at 10:15. Exiting the open above 2020.50 would be likely also to exceed the 2019.50 bias-up target at 10:15 to renew the bias-up signal, next targeting 2025.50. Exiting the open under 2003.50 would be likely to trigger the 2005.75 bias-down signal.