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…
For never committing either way, Tuesday’s session ranged widely. The first hour offered a glimpse by its opening dip to fresh lows at 1866.00 which then reacted up to 1890.00. Trending down through the noon hour was corrected during the bias environment, and then extended to even lower lows until the last half-hour. The lowest low stopped 2 ticks optimistically short of touching the 1861.00 overnight low before reacting up. The impatient buying persisted, extending the reaction up to the 1877.00 bias environment exit.

Overnight action’s new info…
Tuesday afternoon’s sellers had gained traction by entering the final hour under bias environment low, and then extending through the 3:10-3:20 timing window. But the evening’s 7-point dip to 1871.00 reacted up sharply, and extensively. Last week’s 1897.00-1899.00 lows are now being probed above 1900.00.

If, then…
Whatever traction gained by yesterday afternoon’s sellers can be rendered moot by a gap up maintained above the session’s 1890.00 high and by trending up through the opening 15 minutes of volatility. Failing either condition still might not reverse back down immediately, but extending any higher would be only temporary. Extending higher only temporarily can still be pretty productive, up to 1904.75 or to 1915.00 — retesting yesterday’s lows from too high and after too long would find expended buyers unable to prevent a deeper decline.

First Trade…
Exiting the open at 9:45 above 1897.00 would be likely also to exceed the 1892.00 bias-up target at 10:15 to renew the bias-up signal. The renewed bias-up signal is next targeting 1899.00.

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…
Ready, set, sell. Monday welcomed us back with an almost immediate resumption of Friday’s decline from its 1951.00 pre-open highs. Last week’s 1897.00-1899.00 lows were retested overnight. Sliding through late-afternoon attacked 1869.00. Sellers didn’t gain traction, but created potential at least down to 1864.00.

Overnight action’s new info…
Lower lows ahead of Europe’s opens had already probed 3 points under 1864.00 and then back above it. Its reaction up extended at a steep slope to 1886.00. That’s yesterday’s noon hour high, literally the afternoon’s high… retraced, but not (yet) rejected.

If, then…
Despite potential for extending down to 1864.00 or lower, “hold-short” wasn’t contemplated. That was ruled out by yesterday afternoon’s sellers not gaining traction, so fulfilling the target overnight could still recover into the open. In fact, that has happened, but it doesn’t mean the trend is reversed up. Not without recovering some relevant level through the open, which will depend upon what relevant level is touched. For example, a post-open probe above yesterday’s 1886.00 noon hour high that isn’t extending at 9:45 would become likelier to launch an attack on overnight lows. Otherwise, extending higher this morning wouldn’t likely extend for much longer than that, which would be unusual following yesterday’s session-long downtrend.

First Trade…
Exiting the open at 9:45 above 1886.00 would be likely also to exceed the 1887.25 bias-up target at 10:15 to renew the bias-up signal. Exiting the open above 1883.75 would be likely at least to trigger the 1881.50 bias-up signal at 10:15. Exiting the open under 1875.00 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…
Friday was an uneventful day, surrounded by two major events. The first was a 25-point overnight rally that reached 1951.00.  Reacting down to 1939.00 for the open still gapped up above Thursday’s 1926.50 highs. The morning ranged sideways back down to 1931.00, still comfortably above Thursday’s highs. Firming into the afternoon was ambushed by the second event, a 30-point plunge down to 1910.00. The close reacted up to 1925.00, back under Thursday’s high.

Overnight action’s new info…
Sunday night’s open confirmed that Friday’s plunge was not an anomaly. Fresh lows attacked 1905.00 on more signs of China’s “hard landing.” Despite recovering up to 1928.00 and 1930.00 into and out of Europe’s opens, another downleg has probed fresh lows testing 1904.00, presumably in reaction to Glencore’s continued implosion. Its reaction up to 1912.00 was just retraced entirely back down to 1904.00.

If, then…
Bounces help to absorb subsequent selling pressure before it manages to push price under a relevant level during a relevant timing window. Last night’s bounce is being tested for just that, since its 26-point reaction down has probed under Sunday night’s initial low. That often accompanies knee-jerk reactions to old news, which defines the China and Glencore stories. The open should prove that by barely delaying a recovery when new selling pressure dwindles. Another pre-open bounce might invite a brief post-open dip, first. But not already rallying out of the opening 15 minutes of volatility would suggest instead of absorbing sellers, that the bounces themselves had been absorbed. And despite being triggered by old news, the drop was attracting new sellers.

First Trade…
Exiting the open at 9:45 under 1906.25 would be unlikely to recover the 1908.25 bias-down target by 10:15, which would renew the bias-down signal. Exiting the open above 1912.25 would be unlikely to renew bias-down. Exiting the open above 1919.00 at 9:45 would be unlikely to trigger the 1914.00 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 open under 1918.00 had put into play 1899.00. Meeting it, and gapping down, reflected a lot of pessimism. Isolating that sentiment to a single timing window prevented new sponsorship so we could anticipate a bottom. Recovering through the afternoon well above the morning’s highs attacked 1927.00. And buyers gained traction for their effort to suggest more upside.

Overnight action’s new info…
Initially blipping down to 1913.00 was recovered as quickly to attack 1928.00. Sideways ranging finally started breaking higher after midnight. A brief consolidation up to 1941.00 is now being tested as support, following an interim spike up to 1951.00.

If, then…
One obvious question this morning is whether the bullish scenario is fulfilled already. Rallying 54 points in 18 hours doesn’t confirm the 1899.00 objective’s significance, any more than the decline’s big bounces off of its 1938.00 and 1918.00 objectives. Much more revealing than its size is that last night’s bounce is probing above prior sessions’ highs, something which the prior bounces did not. One other obvious question is whether the overnight 25-30 point rally already has rewarded yesterday afternoon’s buyers for gaining traction. This being a Friday, that answer could define much of the day’s direction.

First Trade…
Exiting the open at 9:45 above 1938.00 would be likely also to exceed this morning’s 1936.25 bias-up target at 10:15 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…
Tuesday night’s plunge under its intraday range down to 1910.50 had been reversed to probe above Tuesday’s highs up to 1941.75. Wednesday’s intraday action was contained almost entirely within Tuesday’s range. But that didn’t prevent its swings from being wide, peaking at 1938.50 and then dropping to 1920.50. It was only the late-afternoon window when volatility began to subside.

Overnight action’s new info…
Similar to Tuesday night, but not — especially the sequence. Trending down 19 points probed under Wednesday afternoon’s low to 1917.00, to within 2 ticks of the bias-down target. It was recovered to probe above 5 ticks above Wednesday afternoon’s 1935.00 high. Just like Tuesday night, but in reverse… Oh, wait, then the market began a 28-point slide to fresh lows at 1907.50.

If, then…
Overnight action followed my prescription I had discussed yesterday — probing fresh lows didn’t have to extend, but was unlikely to extend, and likelier to recover into a rally. My treatment didn’t apply to reversing the recovery back down to probe even lower lows, substantially lower lows at that. Any bounce short of 19240.00 or 1927.25 would remain vulnerable to reversing back down. Bouncing back only to the range’s 1920.50 lower-end would more likely refuel a much deeper drop, even if that bounce were entirely pre-open.

First Trade…
Exiting the open at 9:45 above 1918.00 would be likely also to recover the 1916.50 bias-down target through 10:15 to avoid renewing the bias-down signal. Exiting the open under 1912.00 would be likely to renew the bias-down signal at 10:15.