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…
Thursday”s gap up to 2109.00 reacted down immediately as the cash session crowd”s pessimism was allowed to interfere. But the morning”s 2105.00 bias-up target held as support, renewing the bias-up signal, and quickly producing fresh highs. The rally extended higher through the afternoon to fulfill its 2117.75 bias-up target, 2 points short of touching the 2119.75 prior high, and 3 points short of my longstanding target for its retest. Extending the open”s gap up served by proxy to trigger a late bullish WedEX.

Overnight action”s new info…
The rally eventually resumed, surging to 2122.75 ahead of Europe”s opens. There has been no improvement since then, as price ranges choppily sideways above yesterday”s highs. The new high was produced by a single surge from under yesterday”s high, and it has yet to be probed, so it is NOT a “new Globex trend extreme” that would otherwise require being retested intraday.

If, then…
This being Expiration, there are a couple of extra features to the usual Friday Factors. The most important is that gapping open is vulnerable to being the session extreme. So, ticking down immediately at the open and trending down overall through it would warn that WedEX is inverting to bearish. WedEX triggered late, so it remains vulnerable. Avoiding those two conditions — tick/trend higher post-open — would diminish the WedEX inversion vulnerability. Whether inverting down or not, trending is likely today.

First Trade…
Exiting the open at 9:45 above 2123.50 would be likely also to trigger the 2120.75 bias-up signal at 10:15. Exiting the open under 2115.00 would be unlikely to trigger bias-up.

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 session was contained by Tuesday”s “equilibrium” signal. A pre-open surge to 2105.75 was retraced to 2096.00. A post-open surge retested the pre-open surge, and was retraced even faster to 2093.00. Afternoon choppiness continually returned down to 2093.00, but a late probe of it reacted back up into the close.

Overnight action”s new info…
Wednesday”s late reaction up initially extended to 2098.50. Sliding touched 2092.00 soon after Europe”s opens, and reacted back up abruptly. Yesterday”s 2105.75 pre-open high was touched to within 1 tick, and price has hovered under there since then.

If, then…
Here we go again? There”s a difference between yesterday”s rally effort, and today”s. The promise of yesterday”s trending efforts were vulnerable to their equilibrium origin, which prevented them from extending. Yesterday”s trending attempts were the product of a signal that both launched them and reversed them. Today”s trending is the signal, launching from yesterday afternoon”s setup that requires trending to begin by gapping up or surging immediately. This trending attempt”s promise is vulnerable, too, and not extending higher post-open could retrace back to yesterday”s lows with little hesitation.

First Trade…
Exiting the open at 9:45 under 2098.50 would make the 2099.50 bias-up signal unlikely to trigger at 10:15. Exiting the open above 2101.50 would be likely to trigger bias-up. And exiting the open above 2109.00 would be likely also to recover the 2105.00 bias-up target through 10:15 to renew the 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…
Monday night”s slide exceeded its 2091.25 pullback limit considerably. Tuesday”s volatile open ranged choppily under that limit, and probed above it. Each timing window probed higher and higher, although each leg overlapped the morning”s test of 2096.00-2097.00. Buyers didn”t gain traction, exiting the bias environment above the noon hour”s high. But neither of the next two timing windows extended higher — the final hour”s entry and 3:10-3:20 remained within the noon hour and bias environment ranges.

Overnight action”s new info…
Lacking traction didn”t prevent extending higher, first to test 2101.50 last night, and more recently to briefly touch 2105.75. That has reacted down to test 2101.50 as support.

If, then…
Overnight highs are probing back within Monday afternoon”s range, chipping away at its resistance and clearing the way for any post-open effort. If there is one. Gapping up is necessary to resume a rally that didn”t gain traction. So, this action is promising, keeping alive potential to new highs within 24-48 hours. Meanwhile, no prior traction also makes gapping up vulnerable. Not extending it post-open can produce a rubber band effect whose reversal down retests yesterday afternoon”s lows, which are 15-16 points lower.

First Trade…
Exiting the open at 9:45 above 2104.25 would be likely also to trigger the 2101.50 bias-up signal at 10:15. Exiting the open under 2098.25 would be unlikely to trigger bias-up. Exiting the open under 2096.00 would be likely at least to attack Friday”s 2090.00 noon hour lows, and perhaps also this morning”s 2088.00 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…
Firming at Monday”s open peaked upon touching Friday”s 2113.50 prior high. Its recovery was necessary to resume Friday morning”s rally, since buyers were fully rewarded and had failed to gain new traction. Trending back down through the afternoon”s bias environment stopped a little optimistically short of its potential to at least 2102.50. Last-hour selling took over by probing the lower-end of its potential down to 2098.50. No unfinished business below was left outstanding.

Overnight action”s new info…
Monday”s late dive extended to test 2096.00. Relatively narrow ranging tired of the status quo, and eventually firmed up to 2101.00. Apparently, that only angered the market into snapping back down sharply to fresh lows. A seemingly relentless slide has extended to attack 2079.00 — along the way, ignoring three consecutive 3-minute RSI positive divergences (four 1-minute divergences). The last divergence was finally recognized by printing at least 2085.00. And then it reacted back down to 2082.00.

If, then…
Two points: First, while yesterday”s pullback was sufficient to extend the rally targeting new highs lower lows at 2091.25-2092.50 would have confirmed. And still could. Recovering at least that much by the open, and then improving through the open, could probe new highs today. Today, not a typo… Second, the alternative is diametrically opposite, and then some. Three consecutive ignored positive divergences (bouncing only shallowly before extending lower) happens when market facilitators panic calmly. At this stage, either they”ve absorbed very large selling pressures, or at least an equivalent amount is yet to come. The former would form a bottom, while the latter could last all day — conservatively targeting the 2062.00 area. More so, the latter could take new highs off the table… A third bonus point: Among other scapegoats, the drop is associated with Greece”s debt payment scheduled today. Making it wouldn”t end their crisis, but it would likely end this leg. Meanwhile, VZ just announced it is buying AOL at a 20% premium to yesterday”s close, so scapegoats for a rally aren”t all dead.

First Trade…
Exiting the open at 9:45 above 2093.50 would be likely to recover this morning”s 2092.50 bias-down target through 10:15, and not renew the bias-down signal. Exiting the open under 2084.50 could extend next to the 2077.00 area.

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 morning”s bullish reaction to the pre-open Employment Situation report had gapped up above the critical 2090.00-2095.25 resistance. Higher and higher resistance was tested until the upward momentum finally peaked at 2013.00 through the bias environment”s exit. Sideways ranging into the weekend held 2107.50.

Overnight action”s new info…
Flat-to-lower ranging gyrated  as low as 2105.50, where a surge has now attacked the 2110.50 open. But the overnight range is still relatively narrow.

If, then…
If the open isn”t rejecting Friday”s rally, then it is likely to extend higher — probably today, if not already this morning. Opening only slightly in negative territory could gain traction by trending down through the open, And still be absorbed. But opening even slightly in negative territory would be unlikely to extend higher this morning. Opening in positive territory and quickly extending through Friday”s high may be the only reliable start to a morning rally.

First Trade…
Exiting the open at 9:45 above 2111.00 would be unlikely to trigger bias-down at 10:15. Exiting the open above 2114.75 would be likely to trigger the 2112.00 bias-up signal at 10:15.