The First Trade

Proper context can start the day with a solid win and make all the difference.

DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close…
Tuesday’s session included several overtly optimistic characteristics, different from Monday’s, but keeping alive the contrarian bearishness. Tuesday’s gap up was extended to 2574.00 before reversing back down into Monday’s close at 2555.00. Another bounce attacking the high was also retraced fully. That reaction extended back down to Monday’s 2532.00 low entering the final hour. Quickly bouncing 30 points was nevertheless retraced through the close, its catalyst being a warning from FDX, finally fulfilling the decline’s 2530.00 target.

Overnight action’s new info…
The Globex open immediately began reversing the late plunge to 2530.00. The retracement had reached 2555.00 by midnight. Ranging narrowly sideways through Europe’s opens continued holding the range’s 2552.00 lower-end. The recovery eventually resumed to now attack yesterday’s late surge peak to within 1 point at 2561.50.

If, then… (notes to accompany the Tour recording)
The decline’s 2530.00 target was actually met after the close. Its test was likely to be done on the way down to 2500.00, which is still likely. But now the door to a detour has opened. Tuesday’s late surge could have triggered a detour by maintaining its probe above 2555.00. Gapping up and extending Wednesday above 2564.50 could still qualify by proxy. Otherwise, almost any post-open dip back into the 2530.00-2538.00 range will mean the stretched rubber band is snapping back down, and likely to probe its lower-end and then extend the decline — vulnerable to accelerating.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2562.50 would likely also exceed the 2564.50 bias-up target at 10:15 to renew the bias-up signal. Exiting the open under 2555.00 would be unlikely to trigger the 2557.50 bias-up signal at 10:15.

Proper context can start the day with a solid win and make all the difference.

DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
I AM AWAY FROM THE SCREEN DURING THE FIRST HALF-HOUR

Through the prior close…
Sunday night’s initial 13-point bounce attacked 2617.00, but began breaking lower before Europe’s opens, and kept breaking lower through it. Greeting Monday’s open under Friday’s low at 2593.00 — still within last Monday’s range — suddenly plunged to new lows at 2571.00. Bouncing 35 points probed back into Friday’s range and into positive territory but stopped just ticks short of reversing momentum up. Having only refueled sellers, the decline established a likely target at 2555.00 that was met going into the final hour. The position-squaring window touched 2533.50, but 2555.00 was recovered through the close.

Overnight action’s new info…
Yesterday’s late recovery initially extended up to 2569.00, where China headlines triggered a reaction down to 2553.00. The test of yesterday’s close(s) essentially avoided negative territory, and recovered to attack the earlier 2569.00 high.

If, then… (notes to accompany the Tour recording)
I AM AWAY FROM THE SCREEN DURING THE FIRST HALF-HOUR. Yesterday’s morning’s big bounce and its potential for recovery wasn’t only retraced entirely. It was retraced relentlessly, but not very quickly. The slow descent reflects the ineffectual side of the optimism coin, the flip-side to the morning’s excessively optimistic bounce. Both are bearish from a contrarian perspective, so two of the three important questions are whether Monday’s ultimate low neutralized that bearishness, and if any new bearishness gained traction. The new low close keeps the decline intact, but a lot of calculable selling pressure was met and held — this leg’s 2530.00-2538.00 objective was met down to 2533.50, and then recovered to hold the morning’s 2555.00 target. So, early strength would be credible for a morning bounce. By the way, the third important question to ask is whether any new optimism is joining yesterday’s, and the answer may be yes with last night hovering exclusively in positive territory. Another corrective bounce could test 2595.50 without threatening the decline’s lower objectives at 2530.00 which can be met on the way down to testing 2500.00. I AM AWAY FROM THE SCREEN DURING THE FIRST HALF-HOUR.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2555.00 would be unlikely to trigger the 2558.25 bias-up signal at 10:15. Exiting the open above 2563.00 would be likely to trigger bias-up. Exiting the open above 2566.00 would be likely to exceed the 2564.75 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.

DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close…
Friday’s gap down held a test of Tuesday’s ~2626.00 low through the open and bounced. As did a mid-morning retest. Which usually on Fridays will have trapped sellers into getting squeezed for a bigger bounce through the close. But Friday’s retest of Tuesday’s low failed before the bias environment had lapsed, reflecting stronger-handed sponsorship. Two noon hour reversal attempts were facilitated by Friday Factors, but not exploited as the balance of the session trended back down to prior lows attacking 2597.00.

Overnight action’s new info…
Sunday night’s open blipped-down to a fresh low at 2595.50 and immediately began recovering. Hovering at or above 2616.00 began breaking lower before Europe’s opens, and extended through Europe’s opens, until touching 2602.00. Its 11-point reaction up has now been retraced entirely to pierce under 2601.00.

If, then… (notes to accompany the Tour recording)
Friday’s close was a new low close, albeit still within the range of Monday’s prior intraday low. The latter aspect keeps alive potential for another bounce. But any delay should be only a formality while in the process of launching another downleg of the bigger picture’s ongoing decline. The resolution to this morning’s open could dictate whether the near-term resolution includes another bounce. Leaving a gap outstanding won’t be predictive.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2608.50 would be likely to trigger the 2606.50 bias-up signal at 10:15. Exiting the open above 2599.00 would be unlikely to trigger bias-up.

Proper context can start the day with a solid win and make all the difference.

DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close…
Thursday’s 2665.50 open was a 10-point gap, but nearly 10 points under the overnight high. Which a post-open surge retested before the bias signal triggered. The balance of the session formed a series of wide-swinging lower lows and lower highs through the afternoon bias environment’s 2641.25 low. Bouncing into the position-squaring window held a retest of the bias environment’s 2659.00 high, settling mid-range to close at 2650.50.

Overnight action’s new info…
Globex had only ranged narrowly around 2650.50 for an hour when a Trump allegation headline triggered a slide down to attack 2627.00. Flat-to-lower ranging into Europe’s opens started sliding again to 2617.00. Reacting up is testing the earlier low up to 2629.50, still a double-digit loss from yesterday’s close.

If, then… (notes to accompany the Tour recording)
There’s nothing artificial about the pullback’s fresh lows greeting today’s open. But reinforcements have room down to 2612.00 or even to 2603.00 before confirming that the bigger decline has resumed with a more durable, productive break under October’s lows. To which the session will remain vulnerable even if the morning bounces, at least until a relevant timing window were to recover 2636.00.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2636.00 would be likely also to exceed this 2638.75 bias-down target through 10:15 to renew the bias-down signal.

Proper context can start the day with a solid win and make all the difference.

DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close…
The last session for the Dec contract as front-month was greeted optimistically, attacking the prior session’s highs. The renewed bias-up target was already being probed. Trending choppily but surely higher through the morning extended to within 3 ticks of the next likely target at 2687.00 (basis Dec, 2691.00 basis Mar). I had already warned that its test would push back on even the most bullish template, and the balance of the session tumbled. The likely pullback targets were the opening gap’s 38.2% and 61.8% proxies. The first gap-fill proxy at 2658.25/2662.25 was met in time to produce a 10-point bounce, which completed in time to collapse through the close, fulfilling the other gap-fill proxy at 2650.50/2654.50.

Overnight action’s new info…
The next lower target was met at the cash session close, and then probed by 4 points. Bouncing into midnight recovered to attack 2666.00/2670.00. Another surge greeted Europe’s opens at 2671.00/2675.00, where Wednesday’s late bounce had peaked. This peaked, too, trending back down since then to attack yesterday’s post-close lows down to 2647.50/2651.25.

If, then… (notes to accompany the Tour recording)
Wednesday afternoon’s 2681.00/2685.00  bias-up signal doesn’t require being retested, but would be a strong attraction to another upleg. Last night’s failed bounce could have become that upleg, and now a retest of its peak could become that upleg. Regardless, any new upleg would have potential to resume the rally, especially so long as yesterday’s late lows hold any test through the open. Breaking lower would not necessarily produce a straight shot down, but its next major lower attraction would be 2624.00, for which there isn’t much bullish reason to revisit.
NOTE: Coverage rolls forward at the open to the Mar (H) 2019 contract, which trades at a 4-point premium to Dec (Z) 2018.

First Trade…
[Click here to view the Bias parameters] BASIS MAR: Exiting the open at 9:45 above 2654.50 would be unlikely to trigger the 2651.25 bias-down signal at 10:15.