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…
Another attempt to recover 2118.00 at the open failed Friday, more substantially than any prior recovery attempt there. Just returning to 2112.00 had signaled a bigger reversal underway, which quickly extended down to 2102.25. Bouncing to 2115.00 on a Greece headline was largely retraced, albeit stopping optimistically short of actually touching the low.

Overnight action”s new info…
Firming Sunday night extended quietly back up to 2114.00 before being reversed sharply back down to 2104.00. A Symmetrical Triangle formed there, and then an hour ago it launched a 5-point surge to 2110.75 (reacting to a Greece headline, of course). That was retraced almost as quickly, now hovering above 2104.00.

If, then…
The first breakout from a Symmetrical Triangle is often false, and reversed more substantially in the opposite direction. Reversing the hour-old failed 5-point surge can measure another 8 or 16 points. Either would be part of fulfilling the probe under last week”s 2096.00 low by 2-3 points. This reversal must be influential during the opening 15 minutes, or else another bounce to 2114.00-2115.00 would be likelier.

First Trade…
Exiting the open at 9:45 under 2101.50 would be likely also to trigger the 2104.25 bias-down signal at 10:15. Exiting the open above 2108.25 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 afternoon”s rally recovered to close back above 2118.00, which isolated its probe to intraday. That intraday test of 2112.00 support (down to 2110.50) had marked the deepest dip to be considered as a pullback. Dipping any deeper intraday than to test 2112.00, or closing any lower than 2118.00, would have signaled a reversal back under Tuesday”s lows. Positive territory was avoided entirely, until a post-close surge (i.e. weak-handed) up to 2122.50.

Overnight action”s new info…
Flat-to-lower ranging once again began trending into Europe”s opens. And once again, trending plunged, soon touching 2112.00. The consolidation there didn”t extend down. Au contraire, it launched a surge back up to 2122.00. Its reaction down is touching 2118.00 as support.

If, then…
Already recovering above 2118.00 at yesterday”s open would have been expected to surge through the morning. Recovering through the close need not rally any more powerfully, but delaying it much past the open would again suggest another dip underway back down to 2112.00. This pattern can absorb that selling pressure only during an irrelevant timing window. And having done that overnight already, repeating it intraday would start making new lows likely.

First Trade…
Exiting the open at 9:45 above 2121.25 would start making the 2122.50 bias-up signal likely to trigger at 10:15 — more so, if 2124.00 were recovered at 9:45. Exitig the open under 2113.00 would be likely to trigger the 2115.00 bias-down 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…
How volatile was Wednesday”s opening 15 minutes of volatility? The gap up to 2107.00-2108.00 resistance was rejected down to 2102.50, and then recovered up 2115.75. How much buying pressure was expended intraday? The morning”s consolidation resolved up to trigger another bias-up, and its 2124.00 target was met at the session high. How relevant is that level? It filled the gap back to Friday”s close, and its last-minute reaction down fell 4 points. No unfinished business was left outstanding above.

Overnight action”s new info…
.Wednesday”s late dip eventually extend down to attack 2117.50 support ahead of Europe”s opens, while China”s stock exchange crashed. Lower lows briefly touched 2115.25 and then reacted back up to 2120.00 resistance.

If, then…
.Leaving unfinished business helps trending to persist between sessions. So, neutralizing so many upside attractions yesterday has sent the recovery searching for another self-preservation technique. One of those is to search for buyers at a lower level. Determining the success of last night”s search may be as simple as recovering and defending positive territory through the open. The reward is new highs above 2134.00, and the punishment could be to retest Tuesday”s 2096.00 lows.

First Trade…
Exiting the open at 9:45 under 2122.25 after already touching it would be unlikely to trigger the 2127.00 bias-up signal at 10:15. Exiting the open under 2116.00 would be likely to trigger the 2117.50 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…
The sentiment of several dips during holiday trading bled into Tuesday”s open, which gapped down from 2124.25 and trended down sharply through the morning to 2100.25. Bouncing into the morning bias environment”s exit resolved down to new lows at 2096.00 as the afternoon bias environment”s exit. The final hour”s bounce to 2101.50 extended to 2107.00 into the Globex close.

Overnight action”s new info…
Tuesday”s post-close surge was clearly weak-handed. Backing-and-filling through Europe”s opens didn”t find a bid until testing 2101.50, then surging to 2107.75. Not surprisingly, that bid came amid Grexit news. Surprisingly, this morning”s Grexit news is seemingly worse than what was scapegoated for yesterday”s opening slide.

If, then…
So, die by the Grexit, re-birth by the Grexit? As much as Greece exiting the Euro creeps inevitably closer, sell-offs on its fears have been temporary. The ugly Euro chart makes the news seem closer, but S&Ps will shrug it off again if a second consecutive lower close is avoided today. Regardless of this pre-open fiming amid worse Grexit news, S&Ps still must gap up and extend higher to avoid at least retesting yesterday”s low.

First Trade…
Exiting the open at 9:45 above 2108.00 would be likely also to trigger the 2106.75 bias-up signal at 10:15. Exiting the open under 2101.50 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…
Friday”s gap down to the recent range”s lower-end ranged choppily sideways, as participation thinned ahead of the three-day holiday weekend. Bounces back to unchanged at 2124.25 held two tests as resistance, with no traction gained either way.

Overnight action”s new info…
Even the holiday”s thinner market environment has shown no shortage of sentiment. Three dips and three bounces, each of significance. Sunday night”s opening bounce feel from 2127.00 to 2118.50 early Monday morning, before bouncing again to 2126.00. Its reaction down Monday evening attacked Sunday night”s low before bouncing to 2124.50 into Europe”s opens. That reacted down the hardest, testing this morning”s 2115.75 bias-down target. Now its reaction up is testing this morning”s 2122.50 bias-down signal as resistance.

If, then…
The likeliest path higher would isolate a sell-off in the Globex-only timing window, to be recovered already into the open. That was my comment Monday morning before Sunday night”s drop had been recovered fully. I did also note that Sunday night”s 2118.50 low could be retested, but last night”s attack to within 2 ticks would have sufficed. The 9-point plunge to 2115.25 may be starting to damage support. We”ll still give the upside every benefit of the doubt so long as bias-down doesn”t trigger, and more so if the open is back in positive territory. But even the plunge low can be probed today if buyers aren”t back in control very soon.

First Trade…
Exiting the open at 9:45 back above 2125.25 would be unlikely to trigger the 2122.50 bias-down signal at 10:15. Exiting the open under 2118.75 would be likely to trigger bias-down.