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…
Monday”s gap up to 2084.75 was well above the morning”s bias-up target, and it still extended 6-1/2 points higher. A pullback into the noon hour”s 2086.00 low wasn”t recovered enough to trigger the afternoon”s bias-up signal. But when the environment began lapsing, having avoided multiple opportunities to reverse momentum down, the balance of the session trended up to 2094.75.

Overnight action”s new info…
Relatively narrow ranging did manage to touch a fresh high at 2095.25 before dipping down to 2091.50 into Europe”s opens.. Price has since firmed back to yesterday”s 2094.75 high.

If, then…
Yesterday”s surge recovered relevant levels too late to reflect the rally gaining traction. Extending higher overnight would have given the rally credibility. Trending up above relevant levels through the open could still reflect strong-handed buyers being attracted. Having hovered optimistically throughout the night, extending higher would be more credible if appearing much sooner, rather than later. And until extending higher, the pattern meanwhile is vulnerable to at least a corrective dip with potential down to 2077.00.

First Trade…
Exiting the open at 9:45 under 2086.50 would be likely also to trigger the 2089.00 bias-down signal at 10:15. Exiting the open above 2099.25 would be likely to trigger the 2096.50 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 post-close reversal had trended up overnight to gap up Friday at Wednesday”s 2068.00 opening high. Reacting down this time held 2060.00 and resumed trending through the day, albeit shallowly. The rally gained traction from a late-afternoon attack on 2075.00, reacting down to test the open”s 2068.00 high.

Overnight action”s new info…
Weekend developments surrounding Greece were quite different from Thursday”s post-close catalyst. Sunday night”s gap down touched 2052.00, retracing 61.8% of the rally from Wednesday”s low to Thursday”s high. I noted in the chaRTroom that could have been much worse. Recovering back to unchanged was corrected before surging past Friday”s highs to 2079.00 through Europe”s opens. That has extended to attack 2088.00, as much into positive territory as Sunday night”s gap down was negative.

If, then…
Friday”s rally had gained traction, so trending up this morning all but requires extending a gap up through the open. And the indicated gap up would break above the two-week trading range highs where previous gaps up went to die. A reaction down could test the range”s “lower prior highs” down to the 2073.00 area before suggesting another recovery effort has failed.

First Trade…
Exiting the open at 9:45 above 2081.50 would suggest the 2078.50 bias-up target will remain recovered through 10:15 to renew the bias-up signal. Exiting the open under 2068.25 would be unlikely to trigger the 2073.50 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…
Thursday”s gap up tested 2068.00, above Wednesday”s highs and almost 30 points above Wednesday”s close. The balance of the session trended down as the potential session-long rally setup inverted. A last-minute 10-point plunge to 2039.50 nearly filled the gap back to Wednesday”s close. Overbought RSIs were left outstanding at the high.

Overnight action”s new info…
Globex was greeted by favorable developments from Greece, essentially a proposal that seemed to have a chance. The open gapped up 4 points and spiked up another 10 points, and eventually firmed to attack 2062.00. The balance of the night has trended higher, and just touched 2068.50 momentarily.

If, then…
Yesterday”s was well within proximity to Tuesday”s 2035.00 low, which requires a retest. An overnight setup would have made that vulnerable to recovering before the open. That would have greeted the post-close news from a stronger position. Not that its immediate and overnight reactions would have been bigger. But is it only from being oversold, or is it actually durable past this morning? As we saw yesterday, maintaining the reaction above relevant levels through relevant timing windows will signal whether the reaction is extending, or melting away. This being a Friday, the open and the bias windows will be very consequential. As with all single-minded overnight trending, the opening 15 minutes of volatility can answer whether or not new sponsorship has been attracted.

First Trade…
Exiting the open at 9:45 under 2065.75 would start to suggest the overnight rally had attracted intraday sponsorship. Exiting the open under 2059.25 would suggest not, and back under 2057.25 would start to signal that sellers were attracted.

Proper context can start the day with a solid win and make all the i 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…
Gapping down Wednesday to its 2062.50 bias-down target was extended lower through an eventful day, marked by an unprecedented NYSE halt and unaccommodating FOMC Minutes. It was an inside day, which often makes the pessimism ineffectual. But the final hour hovered optimistically above Tuesday”s lows after piercing Tuesday”s 2037.25 pivotal low.

Overnight action”s new info…
Almost the mirror image of Tuesday night”s pattern, last night”s Globex action has only trended up. Yesterday”s entire session has been retraced, touching its opening blip-up 2061.75.

If, then…
Having trended down into yesterday”s close, maintaining a gap up above the afternoon”s 2053.25 high could form a “session-long rally” setup. The gap up”s threshold will be yesterday morning”s 2058.00 high if today”s open were still probing above it. In either case, maintaining the gap up would leave unfinished business below, since touching Tuesday”s pivotal low requires testing its 2035.00 actual low, too. In fact, that would be the objective of not maintaining a sufficient gap up — which can become more difficult when overnight action has trended relentlessly. Otherwise, a session-long rally would target the range”s 2072.50-2076.00 upper-end.

First Trade…
Exiting the open at 9:45 above 2058.00 would be likely also to exceed the 2052.25 bias-up target through 10:15 to renew the bias-up signal. There are no other relevant preliminary signals, other than the “session-long rally” setup.

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…

An amazing swing Tuesday overcame Monday night”s 17-point rally to 2078.00. Dropping 43 points from there into the morning”s 2035.00 bias environment low had already reflected an extraordinary paradigm shift. Then another shift rallied 41 points into the close. The latter sponsorship was more influential, producing its move entirely intraday. No unfinished business was left outstanding below, but buyers didn”t gain traction for the effort, and the recovery stopped short of closing above a relevant level.

Overnight action”s new info…
The primary thrust of my review of Tuesday afternoon”s recovery was that despite it being inspirational, not closing above a relevant high was cautionary. Expending so much energy without gaining traction for the effort is always likelier to retrace. In fact, Globex began slipping at the open, and extended the drop to 31 points at 2042.25 through Europe”s opens. That has been retraced back up through the 2051.00 level that had greeted Europe”s opens, to now attack 2063.75.

If, then…
Not gaining traction for expended energy is always vulnerable to retracement. Yesterday afternoon”s rally didn”t extend above relevant levels at relevant times. Consequently, it has fallen back to the last low before noon yesterday, literally retracing all of yesterday afternoon”s recovery. So, now the question is whether this drop will gain traction for its effort. Gapping down under yesterday”s 2053.75 bias environment low could form a “session-long decline,” but the current bounce is probing back above that level — to the resistance of this morning”s 2062.50 bias-down target. Unless the open were gapping up into positive territory, this morning”s most bullish scenario may be only to range back to unchanged. Gapping down too deeply could say goodbye to the past week”s range.

First Trade…
Exiting the open at 9:45 under 2058.25 would be likely also to exceed the 2062.50 bias-down target through 10:15 to renew the bias-down signal. Exiting the open back above 2063.25 would be likely to hold above the bias-down target to avoid renewing the bias-down signal. Exiting the open back above 2071.25 would be unlikely to trigger the 2068.00 bias-down signal.