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…
Probing fresh highs overnight at 2094.50 didn”t prevent gapping down Monday. But Thursday and Friday”s lows held at 2075.00, recovering 2080.50 in time to put into play 2091.00. Momentum slowed but did not stop — triggering the afternoon”s 2094.50 bias-up signal targeted 2099.75, which was tested at the cash session”s very last possible minute .

Overnight action”s new info…
Firming into the Globex open soon extended up to 2103.75, 4 points above yesterday afternoon”s bias-up target that had been met at the close. But that was the end of that. Reversing down about 10 points eventually tested and retested 2093.00, probing back under yesterday morning”s highs. Its retest is being accompanied by WMT”s big earnings drop.

If, then…
Yesterday”s rally didn”t gain traction, not at the bias environment exit or at the final hour”s entry. So, gapping up is likely the only way to resume the rally without delay, and a gap up is certainly not indicated at this moment. That said, the overnight dip hasn”t slipped too far back into negative territory — not, yet. Meanwhile, though, a “session-long decline” setup would begin forming by maintaining a gap down under yesterday afternoon”s 2096.00 low. I”ll be skeptical of that setup if it”s not triggered decisively. Recovering positive territory above 2099.25 before the open could get carried away easily to the upside.

First Trade…
Exiting the open at 9:45 under 2096.00 would be likely also to trigger the 2095.50 bias-down signal 30 minutes later at 10:15. Exiting the open under 2099.25 would be unlikely to trigger the 2103.00 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”s late-afternoon”s slide from testing 2089.00 was a suspicious lot of pessimism to appear suddenly, and it had stopped magically at the critical 2077.00 support. And it left “unfinished business above” at 2091.00. Not gapping open sharply in either direction Friday made the balance of the session likely to range choppily in the morning, and then to trend higher into the close. The choppy morning did resolve up, but only to test its minimum objective at 2088.00.

Overnight action”s new info…
Sunday night”s open firmed immediately to neutralize the 2091.00 attraction, and firmed a little further. Eventually, a 6-1/2 point slide attacked 2085.00. The slide had been retraced almost entirely before Europe”s opens, which triggered a surge to 2094.50. That reversed quickly back down to fresh lows attacking 2084.00. Its reaction has been consolidating between Friday”s 2087.25 cash session and 2089.50 futures closes.

If, then…
Extending higher at all Monday is likely to extend higher a lot, to 2095.50, 2099.25 and potentially also to 2105.50. But extending higher also means not quickly rejecting an early gain. Was the overnight failed surge coming out of Europe”s opens just a warning of that rejection, or was it foreshadowing it? It would be the actual rejection, itself, if its reversal were to extend down much lower here.

First Trade…
Exiting the open at 9:45 above 2093.25 would be likely also to trigger the 2091.00 bias-up signal 30 minutes later at 10:15. Exiting the open under 2082.00 would be likely at least to test the 2080.50 bias-down signal. Exiting the open under 2077.00 would be likely to trigger bias-down 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…
Trading overnight 8 points above Wednesday”s high to 2093.00 didn”t qualify as rewarding its intraday recovery for having gained traction. Dipping no lower than 2073.00 during Thursday”s open, and then only ranging sideways through the morning”s bias environment, only delayed the actual reward until Thursday afternoon”s bias environment. That was shallower to only 2089.00, and exiting the bias environment slid immediately to within 1 tick of 2077.00. The afternoon”s 2091.00 bias-up target became “unfinished business above.”

Overnight action”s new info…
Firming through the night repeatedly held tests of 2082.00, but extended higher to test 2085.00 after Europe”s opens. That only stretched the rubber band, which snapped back down under Thursday”s last-minute low. The probe has since extended down to 2074.00.

If, then…
A “session-long rally” setup is off the table since today”s open isn”t yet indicated to gap up. So, rallying anyway would be likely to reverse back down before the close. The most bullish scenario may be a rally effort limited until late-afternoon to 2091.00 — resembling a lot of flat-to-higher choppiness — and then breaking higher. None of which would be relevant if the open isn”t holding tests of support. I”m not aware of any scheduled high-profile events this weekend that might be anticipated as catalysts for widespread defensive selling.

First Trade…
Exiting the open at 9:45 above 2077.00 would be unlikely to trigger the 2073.75 bias-down signal at 10:15. Exiting the open under 2073.00 would be likely to trigger bias-down. Exiting the open above 2089.00 would be likely to trigger the 2087.25 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…
Wednesday”s 16-point gap down to 2064.00 extended sharply lower to 2046.50 through the morning”s bias timing window at 10:30. The balance of the session trended back up relentlessly, recovering into positive territory attacking 2085.00. The recovery gained traction for its efforts, although it left outstanding the potential for a pullback to 2075.25.

Overnight action”s new info…
The first attempt to probe higher touched 2086.00 where another Yuan devaluation triggered a mini-plunge that came within 3 ticks of the 2075.25 target. That recovered quickly, and eventually extended to fresh highs at 2093.00 ahead of Europe”s opens. Another slide probed a point back under Wednesday”s high to 2083.50, but that has recovered to 2091.00.

If, then…
Having gained traction yesterday, the recovery should extend during this morning”s bias environment — actually trending, and not just probing higher momentarily. Early weakness back into negative territory should recover, more so if delayed until the afternoon.

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 above 2095.50 would be likely also to exceed the 2094.75 bias-up target at 10:15 to renew the bias-up signal. Exiting the open under 2075.00 would be likely to trigger the 2077.75 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)
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
Monday”s gap up to 2086.00 had been retraced already overnight in reaction to the Yuan devaluation. Bouncing from 2080.50 through Tuesday”s open soon resolved back down to eventually test 2070.75. Bouncing through Tuesday afternoon came within 1 tick of its 2082.25 target, closing back above 2073.00-2077.00”s relevant support.

Overnight action”s new info…
Firming up to 2085.25 and ranging there narrowly for an hour suddenly plunged 17 points in reaction to more Yuan weakness. Probing under Tuesday”s low fell to 2067.25, which had narrowly avoided becoming targeted by Tuesday afternoon”s bias signal. Ranging down to 2065.00 eventually broke quite a bit lower to 2053.75. Its reaction is testing 2064.00 as resistance.

If, then…
Delaying the test of 2067.25 until Wednesday had made it likelier to be probed regardless of its resolution. Probing it overnight would still be able to recover through Wednesday”s open and form a more durable bottom. The minimum requirement to suggest sellers may be absorbed would be back above 2067.00-2070.00. But this still wouldn”t assure that another rally leg was ready to begin.

First Trade…
Exiting the open at 9:45 back above 2069.50 would make the 2067.25 bias-down target”s recovery through 10:15 likely, too, to avoid renewing the bias-down signal. Exiting the open under 2064.00 would be unlikely to recover the 2067.25 bias-down target in-time to avoid renewing the bias-down signal.