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…
But for the morning’s momentary probe above Monday’s 1980.00 high, Tuesday was an “inside day,” contained entirely within Monday’s range. It might have seemed more substantial in the moment, being under pressure the entire day. But that was the expectation for the day before it even began, and the session didn’t deviate from its purpose. The afternoon’s fluctuation did not reflect buyers or sellers gaining traction.

Overnight action’s new info…
Tuesday’s lows were probed down to 1960.50 in reaction to high-profile earnings misses (setting the stage for the quarterly earnings onslaught?). The balance of the night rallied back to and through Tuesday’s high to 1985.50. A pullback into yesterday’s range at 1975.50 is now trying to resume the rally, currently testing 1980.00.

If, then…
The rally need not resume without delay, but it must resume on its first intraday attempt. The overnight action provides a template — probing fresh highs, pulling back into the range, and then… Post-open action can duplicates this overnight pattern, either extending the rally attempt immediately, or following a pullback into the range. But pulling back too deeply, before upside momentum is re-established, would be vulnerable to launching a new downleg to probe under overnight lows.

First Trade…
Exiting the open at 9:45 above 1981.00 would be likely also to exceed the 1981.00 bias-up target (same level as each other) at 10:15 to renew the bias-up signal. Exiting the open under 1974.00 would be unlikely to trigger the 1976.00 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 session rode the wave of the combination of follow-through from Friday’s inverted session-long setup and from that afternoon’s buyers gaining traction. That, and having closed Friday at the 1942.00 objective without rejecting it, then already testing the next higher 1960.00 objective overnight without rejecting it. But only hovering up to 1980.00 beyond the afternoon bias environment’s exit prevented buyers from gaining new traction.

Overnight action’s new info…
Gapping down to 1971.00-1973.00 initially bounced to 1975.25, but then trended down through Europe’s opens to 1963.50. A bounce to 1973.00 has been retraced 61.8% back down to 1967.25.

If, then…
The rally had become extended without gaining traction, making a pullback likely if today’s open doesn’t gap up above yesterday’s highs. That’s not impossible from a 10-15 point discount two hours before the open. And it’s not very very difficult in this wide-ranging environment. But gapping up is unlikely after having traded at a deficit throughout the entire night. Nevertheless, opening above the overnight highs could still probe above yesterday’s highs temporarily..

First Trade…
Exiting the open at 9:45 above 1976.00 would be unlikely to trigger the 1972.00 bias-down signal at 10:15. Exiting the open under 1970.25 would be likely to trigger bias-down.  Exiting the open under 1965.00 would be a little likelier also to exceed the 1964.00 bias-down target through 10:15 to renew the bias-down signal, next targeting 1956.00.

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…
Plunging on Friday’s pre-open payrolls report was sponsored by strong hands. We know this because the open maintained a gap down under Thursday afternoon’s 1891.50 low to 1883.00. But the “session-long decline” setup it had triggered was never any more productive before inverting through the bias environment’s exit. The balance of the session fulfilled that inversion above and beyond its minimum requirement — not only filling the gap back up to Thursday’s 1913.50 close, but also retracing the pre-open plunge’s 1928.50 origin, and then probing even higher to attack 1944.00. Buyers gained traction thanks to trending up through the 3:10-3:20 window to confirm the bias environment having been exited above the noon hour’s high.

Overnight action’s new info…
The prior session ended by testing 1942.00 resistance, but Sunday night’s initial weakness held 1937.00 while consolidating into midnight. A break higher was retraced back into the consolidation, and then high, now attacking 1958.00.

If, then…
Closing above the 1942.00 resistance would have put into play the next higher objective at 1960.00. Overnight action is posturing the open to potentially satisfy it. Like closing at an objective, the next timing window can extend higher if the reaction is limited in both duration and depth. But gapping up without an interim pullback from having closed AT an objective is difficult to extend higher, and at least a pullback is likelier. Especially on Mondays, when greeting the new week with extreme sentiment is often a sentiment extreme. So, extending higher this morning depends upon extending higher with hardly any hesitation.

First Trade…
Exiting the open at 9:45 above 1953.00 would be likely also to maintain the recovery above the 1948.00 bias-up target to renew the 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…
Thursday was the second consecutive session that found at least two ways for sellers to expend energy without reversing the trend down. Yesterday’s session went so far as to allow the afternoon’s bias-down to trigger. Its 1981.50 target had been met already during the noon hour, which opened the door to rallying above the satisfied 1897.00 bias-down signal, despite still being a bias-down environment. While that’s clearly possible, it did leave “unfinished business below” at the 1897.00 bias-down signal. But it didn’t prevent triggering three buy signals as the balance of the session rallied back to test the open’s 1917.00 high.

Overnight action’s new info…
Intraday action seems to have been duplicated overnight. There was an early surge to 1923.00, it eventually reacted down into negative territory at 1913.00, and the balance of the session has recovered earlier highs. And higher, testing 1925.00.

If, then…
The overnight high is still a little short of Wednesday night’s 1927.50-1929.50 highs, but it’s above Thursday’s intraday high. The market seems to have wanted to greet this morning’s Employment Situation report optimistically. But no relevant level was recovered on a closing basis while expending so much buying pressure. It’s essentially the inverse of intraday action that has been letting sellers expend energy without gaining traction for their effort. The intraday selling efforts didn’t attract new sponsorship, but the buying efforts still can. Whichever way the bounce from Tuesday’s low may resolve this morning, it could be at least 70 points in either direction.

First Trade…
There are no preliminary indications ahead of an Employment Situation report.

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 21-point gap up to 1896.00 extended up to 1907.00 at the morning’s high, testing the 1904.75 target. It was retraced down to 1886.50 at the noon hour’s low, to within 2 ticks of the bias-down target. The balance of the afternoon climbed back to fresh highs fulfilling its 1909.75 room for noise above the morning’s target. Closing there instead of higher or lower prevented putting into play the next higher objective. or signaling that this one had held.

Overnight action’s new info…
The reaction to 1909.75 was a 9-point reaction down into and out of the Globex open. Firming back to the morning’s 1907.00 high then accelerated its pace up to 1927.50.  Higher highs into and out of Europe’s opens touched 1929.50. But that has reacted down to 1918.00.

If, then…
Gapping down seems unlikely. The other bearish scenario following yesterday’s rally included probing fresh highs before revering down before noon. The next higher objective at 1915.00 wasn’t one bit influential overnight as resistance, so it should be tested as support. Its room for noise up to 1921.25 has been probed overnight only, and not yet post-open. That could make the difference between whether a dip to 1915.00 holds, or breaks lower — not yet probing above 1921.25 before testing 1915.00 would be more vulnerable to extending down. Otherwise, recovering 1921.25 through a relevant timing window would extend the corrective rally, while making its eventual failure much likelier to extend much lower.

First Trade…
Exiting the open at 9:45 above 1918.50 would be likely to exceed the 1915.00 bias-up target at 10:15 and to renew the bias-up signal. Exiting the open under 1913.25 would be unlikely to renew bias-up.