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…
Sunday night”s slide extended down to fresh lows at 2056.50 through Monday”s open. Recovering back above the 2063.50 opening print to attack 2070.00 was retraced back to the morning”s low. A last-minute surge recovered 2063.50 through the close, extending higher to 2065.00.

Overnight action”s new info…
Monday”s last-minute surge firmed further to attack 2067.00 but dipped back to 2063.50 while China”s crash resumed. Then it un-resumed, encouraging a bigger bounce that extended to 2077.00. Ranging flat-to-higher has held 2071.00 as support, while briefly probing fresh highs above 2078.00.

If, then…
Since yesterday afternoon”s sellers didn”t gain, dipping only between timing windows, the decline became vulnerable to correcting. Gapping up too shallowly would produce only a brief correction that would soon resume trending down to the 2051.00 target in-play. But gapping up well into Friday afternoon”s 2070.00-2077.00 range could form a longer-lasting Island reversal. Overnight action has retraced that range, and can now either sustain it to begin a multi-session corrective bounce. Maintaining the gap up wouldn”t necessarily extend much higher yet this morning. Not maintaining the gap could become a massive “outside day” that could fulfill the lower target.

First Trade…
Exiting the open at 9:45 above 2077.00 would be likely also exceed the 2073.00 bias-up target at 10:15 to renew the bias-up signal, next targeting 2080.50. Exiting the open under 2071.25 would be unlikely to renew the bias-up signal at 10:15. Exiting the open under 2065.00 would be unlikely to trigger the 2067.50 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…
Despite Friday”s 2097.00 open begin essentially flat with Thursday”s close, it spiked down immediately 6 points back to Thursday”s lows. Closing Thursday under 2099.25had put into play 2077.00 with room for noise down to 2073.00, and they were tested down to 2070.00. Firming through Friday”s final hour was still overlapping the 2073.00-2077.00 target, not decisively holding it or breaking it.

Overnight action”s new info…
Sunday night”s firm open eventually attacked this morning”s 2081.00 bias-up signal to within 1-2 ticks. But selling pressure had become evident already ahead of Europe”s opens, perhaps concerned by China”s renewed crashing. Trending down since then has now begun probing under Friday”s low down to 2067.00 — just 2 points 2065.75 — just 3 ticks from this morning”s bias-down target.

If, then…
In the absence of gapping up, even the most bullish scenario was still likely to probe fresh lows. Gapping down too much or simply not recovering quickly would indicate that late retail sellers were being joined by a new round of stronger hands distributing. And if the decline is extending this morning, then today”s eventual drop could overshadow Friday”s.

First Trade…
Exiting the open at 9:45 under 2070.00 would be likely also to trigger the 2071.75 bias-down signal at 10:15. Exiting the open under 2060.00 would be likely also not to recover the 2065.00 bias-down target, renewing the bias-down signal and next targeting 2051.00. Exiting the open above 2077.00 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…
Thursday morning”s rally neutralized it upside attraction by attacking 2111.00 to within 3 ticks. Without attracting new sponsorship, perhaps inhibited by Turkey firing on Syria, the recovery attempt was undone by a slide to 2095.00 into the noon hour. Similarly, a bounce to 2101.00 was reversed to fresh lows at 2091.50. Its reaction closed back at the noon hour”s low.

Overnight action”s new info…
Futures extended the last-minute recovery to settle at 2099.25. Flat-to-lower ranging began resolving up after Europe”s opens, extending to 2104.00.

If, then…
Closing under 2099.25 puts into play much lower objectives at 2077.00. That close is being challenged overnight, and has yet to be confirmed by a second consecutive lower close. It can still be rejected to foreclose upon the downside, and triggering a significant rally for having expended more selling pressure than is sustainable. Despite the decline having been so productive, its sponsorship by weak-hands is suggested by its impatience, with unfinished business left outstanding above. Even the strongest rally can be blind-sided and overwhelmed by surprises (it”s never “peace suddenly breaking out”). But the weekend”s impending illiquidity has a way of focusing the market on how firmly it believes earnings growth may be at risk. So, with buyers not gaining traction yesterday, gapping up sufficiently this morning is probably the only way to avoid extending the decline. By the same token, maintaining a sufficient gap up — or, at least, extending sufficiently higher through the open — should hardly look back before extending sharply higher this morning.

First Trade…
Exiting the open at 9:45 above 2105.50 would be likely to trigger the 2104.00 bias-up signal at 10:15. Exiting the open under 2099.25 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…
Testing the decline”s 2105.50 target overnight had fulfilled a lot of selling pressure. Probing lower pre-open to the targets”s noise range down to 2103.00 only stretched the rubber band so Wednesday”s open could surge to 2112.00. Triggering a “synthetic bias-up” didn”t prevent returning back down to 2103.00-2105.50. Its next bounce failed, too, right after buyers had barely gained traction. Firming into the close recovered 2105.50 by a couple of points.

Overnight action”s new info…
The late firming extended higher through the Globex open to eventually test 2113.50. It was retested at Europe”s opens, but held. Price action since then has trended back down, mot recently testing 2108.50 and reacting up 2-1/2 points.

If, then…
Buyers gaining traction yesterday afternoon was confirmed by the higher recovery after dipping back down to 2103.00-2105.50. Having gained traction, gapping up is not necessary to resume the rally this morning. But that traction must be exploited this morning by trending up. And gapping down would undermine that traction, potentially also resuming the decline.

First Trade…
Exiting the open at 9:45 above 2112.75 would be likely also to trigger the 2111.0 bias-up signal at 10:15. Exiting the open under 2108.75 would be unlikely to trigger bias-up. Exiting the open under 2103.00 would be likely to trigger the 2104.25 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…
We knew before Monday”s close that not gapping up Tuesday would mean trading flat-to-lower, probably trending down, but to no particular degree. Selling could hardly wait, and could barely stop. A pre-open touch of the 2117.50 bias-down signal had held, but it was broken sharply after triggering no-bias. And it extended down to 2108.00 intraday, triggering the afternoon”s bias-down. Optimism ahead of AAPL”s earnings enabled bouncing back to 2113.00 and then to 2114.00, leaving unfinished business below at the 2105.50 bias-down signal.

Overnight action”s new info…
AAPL”s earnings warning triggered a plunge through Tuesday”s low to 2107.00. It was extended overnight to touch 2105.50. Briefly probing lower another point was recovered back up to 2108.00, and now 2105.50 is trying to hold another test.

If, then…
Room under the 2105.50 target includes 2103.00. Its test will be likely if the open isn”t being greeted by a recovery already underway back into positive territory. Extending down is possible, but less likely since sellers gained no new traction yesterday afternoon.

First Trade…
Exiting the open at 9:45 above 2112.25 would make the 2109.00 bias-down signal unlikely to trigger at 10:15. Exiting the open under 2105.50 would be likely to trigger the 2109.00 bias-down signal. Exiting the open under 2103.00 would be likely also not to have recovered the 2103.75 bias-down target at 10:15 which would renew the bias-down signal.