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…
Tuesday’s gap up to 1952.00 greeted the holiday-shortened week with extreme sentiment. That became a sentiment extreme that required dipping to 1944.00… which the morning promptly fulfilled. Having offset the earlier optimism with a quick dose of pessimism, the rally resumed gradually. Buyers gained traction by exiting the bias environment above the noon hour’s high and entering the final hour higher. The rally extended through the 1961.00 overnight high to 1968.75, closing under the session’s 1967.25 target.

Overnight action’s new info…
The rally soon resumed overnight and extended relentlessly to 1987.50 into Europe’s opens. Trying to resume the rally surged to 1992.00, only to react down to 1982.00. Now 1987.50 is being retested.

If, then…
Yesterday afternoon’s buyers had gained traction, but were already rewarded by then fulfilling the session’s 1967.25 target without closing above it. Not extending higher overnight would have meant reversing down sharply this morning. Having extended higher overnight — no matter how substantially — the rally should be immune to reversing down. This morning’s bias environment is likely to trend even higher, but pulling back instead would then be likely to recover and extend higher this afternoon.

First Trade…
Exiting the open at 9:45 above 1981.50 would be likely also to exceed the 1976.50 bias-up target through 10:15 to renew the bias-up signal, next targeting 1986.00. Exiting the open above 1986.00 would be likely to further renew the signal, next targeting 1996.00. Exiting the open under 1973.00 would be unlikely to recover 1976.50 through 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…
Friday’s gap down to 1920.50 ranged sideways into the noon hour, holding two tests of 1930.00. A late break to 1908.00 was recovered to retest the morning’s highs, but he close settled back around the 1920.50 open. Sellers gained no traction for their efforts.

Overnight action’s new info…
Sunday night’s open ranged sideways for awhile, but had rallied to test 1944.00 by midnight, +14 points from Friday’s close. Its reaction down into Monday’s Globex close held 1930.00 as support. Opening there last night bounced again, but even a more substantial rally has been underway up to 1961.00, +39 points from Friday’s close.

If, then…
Greeting the week with extreme sentiment is often a sentiment extreme. The gap up indicated for Tuesday’s open is attacking natural resistance at 1960.50 which the rally seems intent on testing. But there’s still room to become even more extreme up to 1963.25 and 1967.25. Testing either one at the open would be likelier to reverse back down. The likelihood for extending higher would become suspicious if pullbacks didn’t hold 1956.50.

First Trade…
Today’s bias parameters are far below, so not very relevant. I’ll have levels on-screen in the chaRTroom.

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 immediately extended Wednesday”s last-minute breakout and extended to a 26-point gain attacking 1977.00 by mid-morning. The balance of the day fell back to unchanged, and momentarily through it to 1942.00. Closing around 1847.00 was essentially flat on the day.

Overnight action”s new info…
Plunging 21 points to 1928.00 soon after the Globex open was retraced almost entirely back to 1946.00. The balance of the night has been spent trending back down to and through the plunge”s low to 1922.00. Its reaction up to 1929.00 has extended up to 1931.00.

If, then…
.Trending overnight ahead of an Employment Situation report is unusual. That either reflects how volatile the environment has become, how inconsequential the report is, or how much of a bounce is coming. A bounce? For all of its volatility and probing lower lows, yesterday afternoon”s choppiness didn”t gain traction. That”s no more reliable of a bias to launch trending, than was Wednesday”s late breakout. Gapping down is the only way to extend trending that didn”t gain traction, so the burden of proof is on buyers to absorb the drop. If not yet trending up through the open, then trending down intraday will depend greatly on the reaction already to payrolls. Which is why…

First Trade…
I don”t have preliminary indications ahead of the 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…
After retracing Wednesday”s gap up from testing 1938.00 back down to unchanged attacking 1916.00, price firmed back into the afternoon”s econ report testing 1936,00. A couple of attempts to reverse back down were absorbed, not necessarily easily, before the last several minutes surged to attack 1947.00 and 1949.00 into and out of the cash session close.

Overnight action”s new info…
Surging after the Globex open extended up to 1957.50. That was retraced entirely to attack 1944.00. But, much like Wednesday afternoon”s failed reactions down, not actually reversing the trend only led to another surge. Piercing the.original surge up to 1958.50 has since been hovering above yesterday”s close

If, then…
Not breaking beyond the range by Wednesday”s close before a three-day weekend, price action is likelier to remain within the range. The next nearest attraction above is Monday”s “higher prior lows” at 1967.00. Despite gapping up, its test need not be attacked aggressively. Retracing much of yesterday”s late surge is possible while still resolving up. The only bearish scenario prior to re-testing Monday”s range would be to retrace all of yesterday”s late surge.

First Trade…
Exiting the open at 9:45 under 1953.50 would be unlikely to also exceed the 1954.75 bias-up target at 10:15, which would renew the bias-up signal. Exiting the open above 1957.25 would be likely also to recover the bias-up target at 10:15. Exiting the open under 1943.25 would be unlikely to trigger the 1948.75 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 night”s plunge didn”t extend down immediately. Rather, Tuesday morning formed a Symmetrical Triangle that narrowed between 1921.00-1940.00 to its 1231.00 apex at noon That broke lower into an Expanding Triangle between 1913.00-1927.00 that broke lower into the final hour. Its plunge to 1898.00 was recovered as quickly back into the afternoon”s triangle.

Overnight action”s new info…
Firming back to 1921.00 then accelerated to 1934.00 in reaction to BOJ intervention. Improving later to 1939.00 proved temporary, eventually reacting down to test 1921.00.

If, then…
We haven”t seen an overnight head-fake in awhile. That”s trending in one direction overnight which reverses into quite a different tone through the morning. The reversal tends to be abrupt at the open, but avoiding a head-fake by resuming the overnight trend need not be very obvious immediately. This being Wednesday before a three-day weekend, trending to new extremes should be obvious early, or else new extremes become unlikely. So, sell signals will get a bigger benefit of the doubt than buy signals.

First Trade…
Exiting the open at 9:45 above 1925.00 would be likely also to exceed the 1922.75 bias-up target at 10:15 to renew the bias-up signal. Exiting the open under 1911.00 would be unlikely to trigger the 1915.25 bias-up signal at 10:15.