The First Trade

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

Enter the chaRTroom here
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
The prior high”s retest that began Monday finally broke higher Thursday. But not before one more failed rally required a recovery. That was the morning”s post-open surge to its 2081.25 bias-up signal, which was retraced to its 2069.00 and 2067.00 objectives as “no-bias trending.” The balance of the session rallied 20 points to a fresh high at 2087.00, barely gaining traction for the effort.

Overnight action”s new info…
Sideways ranging between 2083.00-2087.00 only recently began probing higher. It”s not a “new Globex trend extreme,” but there is complexity at 2089.50 and now 2090.50.

If, then…
Yesterday”s rally gained traction only after the bias environment”s exit. Its sponsorship is not the strongest hands. Gapping down today under yesterday afternoon”s lows could have invalidated it, but that now seems unlikely. Gapping up would be vulnerable if its immediate reaction down were not quickly absorbed. This being a Friday, the morning”s bias signal tends to persist through the noon hour. So, triggering bias-up or not can be the difference between extending the rally intraday or else dropping back into the week”s range… By the way, closing higher today would confirm yesterday”s breakout. As bullish as that could be near-term, it is the reason why today”s early momentum can”t yet be taken for granted.

First Trade…
Exiting the open at 9:45 above 2090.75 would be likely also to trigger the 2089.00 bias-up signal at 10:15. Exiting the open under 2083.50 would be unlikely to trigger bias-up.

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

Enter the Chartroom here
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
For the second consecutive session Wednesday, the prior day”s late drop was retraced entirely by an opening surge. Also, retracing that immediate recovery was also recovered, again. And once again, despite absorbing two sell-offs, prior highs were not probed — the range persists. No unfinished business was left outstanding, and neither buyers nor sellers gained traction for their efforts.

Overnight action”s new info…
Post-close earnings misses from AA and BBBY didn”t prevent Initially firming a couple of points to 2078.00. But sliding from there eventually reached 2073.00. After firming into Europe”s opens, the decline resumed with a steeper slide to 2067.25. The last several hours have retraced it all back up to 2077.50.

If, then…
Absorbing dips is potentially constructive. Potentially. Waiting too long before exploiting that potential can become vulnerable to yet another dip gaining traction. Delaying the latest dip this time until overnight is being met by accelerating its recovery to precede the open. Potential for resuming the rally remains alive, and the only proof more constructive than last night”s round trip would be to actually resume the uptrend. The vulnerability to another dip gaining traction remains alive, too, especially if there”s any further delay to resuming the rally after recovering last night”s dip.

First Trade…
Exiting the open at 9:45 above 2077.50 would be unlikely to trigger the 2071.25 bias-down signal at 10:15. Exiting the open above 2082.50 would be likely to trigger the 2081.25 bias-up signal.

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

Enter the Chartroom here
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
Tuesday”s opening surge was retraced entirely after probing above Monday”s high, but recovered quickly from 2072.25 to a higher high that fulfilled the bias-up target. Despite maintaining the potential for resuming the rally, ranging sideways into the final hour broke 10 points under 2077.50 support.

Overnight action”s new info…
The late break”s 2066.00 objective was met soon after the cash session close. A later probe under it by only 6 ticks was recovered to 2073.75. That has since reacted back down to within 6 ticks of 2066.00.

If, then…
End o”quarter earnings season kicks off unofficially today with the high-profile post-close Alcoa (AA) announcement. Whether they”ve been talked down enough will be obvious when the first miss resolves in higher prices. That won”t prevent an initially negative knee-jerk reaction, and the market might meanwhile be walking on eggshells. This afternoon”s FOMC Minutes should have the same inhibiting effect before its release. A path higher can greet these obstacles either from higher ground where a reaction down can be more easily absorbed, or else from lower levels after trapping shorts. The latter path runs the risk of attracting fresher sellers, since yesterday”s pullback is already testing 2066.00 support, with further room only 5 points lower. Perhaps the most suspicious effort would be rallying early to 2075.00-2077.50 resistance without exceeding it.

First Trade…
Exiting the open at 9:45 above 2076.75 would be likely also to trigger the 2075.00 bias-up signal at 10:15. Exiting the open under 2069.00 would be unlikely to trigger bias-up, and likely at least to test the 2066.00 bias-down signal intraday.

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

Enter the Chartroom here
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
Monday”s pre-open firming to 2048.00 extended steeply and substantially. Friday”s Globex plunge from 2063.00 was recovered entirely by the 10:15 bias timing window. Last Tuesday afternoon”s drop from 2074.00 was recovered during the bias environment. Higher highs at 2080.00 stopped 2 points short of touching last Monday”s last relative high. The final hour dipped back down to 2072.25.

Overnight action”s new info…
The final hour”s dip extended slightly lower to test 2070.50 as support. It had been Monday morning”s attraction above, and its support held. Firming into Europe”s opens eventually surged to 2077.50, which had been Monday afternoon”s bias-up signal. Its resistance held, and reacted down to 2071.00. That has now recovered to a fresh high at 2079.25.

If, then…
Yesterday”s late dip wasn”t likely to gain traction for its effort. That didn”t prevent there being potential down to 2066.00 before even beginning to prevent resuming yesterday”s rally. But now that the recovery from 2070.50 has behaved aggressively — surging to 2077.50, twice — post-open action shouldn”t hesitate much before extending the rally. Otherwise, dipping again post-open would put 2066.00 on the radar, if not deeper to 2061.00.

First Trade…
Exiting the open at 9:45 under 2073.00 would be unlikely to trigger the 2077.50 bias-up signal at 10:15. Exiting the open above 2078.25 would start to make the bias-up likelier to trigger.

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

Enter the Chartroom here
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
Thursday”s session had tested 2063.00-2064.00 resistance early, holding there through the close while awaiting Friday morning”s Employment Situation report. It was a big miss, driving stocks down sharply with an early close just minutes away. Not that that the reaction wasn”t justified, as the Dollar fell sharply, too. But the impending illiquidity could only exacerbate matters. And oversold RSIs at Wednesday”s post-open low had required its retest, to at least 2039.00, which held Friday”s Globex close.

Overnight action”s new info…
Sunday night”s open surged to attack 2047.00. A dip back to 2039.00 was recovered to attack 2048.00. All of which is too shallow to suggest that Friday”s drop was just an anomaly. Relatively narrow ranging since then between 2043.00-2047.00 is now getting choppier — the past hour has surged to the range”s upper-end, and back down to its lower-end.

If, then…
Despite Friday”s plunge, gapping down Monday from Thursday”s close is extreme sentiment, and vulnerable to being a sentiment extreme. Opening under 2048.00 won”t be impossible to recover later, just difficult. That”s the bias-up signal, and recovering its 2054.50 bias-up target would be the earliest suggestion that Friday”s plunge was only temporary. And ended. Recovering from under Friday”s low would be possible, too, but less so if not already recovering into the bias environment”s exit.

First Trade…
Exiting the open at 9:45 under 2037.50 would be likely also to trigger the 2039.00 bias-down signal at 10:15. Exiting the open above 2053.00 would be likely to trigger the 2048.00 bias-up signal.