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…
Invalidating Wednesday morning”s no-bias was easily done by a 13-point plunge from 2080.00 into the noon hour. That doubled through the close to 2052.25, touching the week-old low that had printed just minutes before the FOMC event.

Overnight action”s new info…
2052.25 tried its best to hold, but there was no buying effort. Support finally gave way an hour before Europe”s opens, dropping relentlessly to within 1-2 ticks of the last relative low at 2033.25. The reaction up from there has reached 2042.00, still down double-digits from yesterday”s close.

If, then…
Middle East war causing higher Crude Oil is the latest basket of straw on the market camel”s back. Being  this morning”s bias-down target, 2042.00 will act as resistance when tested from below. Probing above it and holding as support through 10:15 would at least avoid renewing the bias-down signal. But the morning”s bias environment would still be bias-down. If a temporary rally like yesterday afternoon”s bias environment is possible, its best chance is probably from a quick probe under the 2033.25 low. Already bouncing back above 2045.00 at the open could follow-through initially, but still not with any confidence of avoiding a later downdraft.

First Trade…
Exiting the open at 9:45 above 2045.00 would be unlikely to renew the bias-down signal, and likelier to hold the 2042.00 bias-down target through 10:15. Exiting the open under 2037.00 would be likely to renew the bias-down signal by not recovering the 2042.00 bias-down target.

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 morning”s bias environment was the session”s only uptrend. The balance of the session trended, too, but only back down to fresh lows. More “unfinished business above” was left outstanding, this time at 2102.00 as an offsetting test of the morning”s bias-down signal. The afternoon”s 2088.75 bias-down target was met, along with its 2083.50 extended target.

Overnight action”s new info…
Choppy action pierced a fresh low momentarily down to 2082.75. That only returned to the 2085.00 area. More recently the choppiness has tried piercing above 2088.00. Those efforts have only returned to the 2084.00-2085.00 area, too.

If, then…
Sellers didn”t gain traction for yesterday”s efforts. Their targets were met and held through relevant timing windows. The last drop to fresh lows waited until after the last two timing windows that would have given sellers traction. So it is assumed by the late sellers” timing that the next leg will be sponsored by strong hands that reverse the downtrend back up, or else extend it down more aggressively. Either one should begin by gapping — whether up above Tuesday afternoon”s high to reject its late extension down, or down below last Thursday afternoon”s low whose upper-end had caused Tuesday”s late extension down to stop.

First Trade…
Exiting the open at 9:45 above 2092.75 would be likely also to trigger the 2091.00 bias-up signal 30 minutes later at 10:15. Triggering the 2079.50 bias-down would be unlikely without also gapping down under it, although exiting the open under 2083.50 could extend down enough anyway.

Through the prior close…
Surging 6-7 points into and out of Monday”s open quickly fulfilled its likely objective to retest Friday”s 2106.75 high. The balance of the choppy session ranged sideways, until a last-minute 6-7 point dive from 2101.00 extended through 2095.00 into and out of the close. The morning”s 2110.25 bias-up target became “unfinished business above.

Overnight action”s new info…
Narrow ranging around 2094.00-2096.00 didn”t reject Monday”s last-minute drop. Neither did it extend it. But a probe lower after Europe”s opens did snap back up sharply from testing 2092.00, all the way up to 2101.00.

If, then…
Gapping up above yesterday afternoon”s 2106.00 high would form a “session-long rally” setup. That”s the only path for resuming the rally without being likely to reverse back down this afternoon. Gapping up is not currently indicated, but just opening back above the 2101.00 inflection point of yesterday”s late dive could still probe back above yesterday”s highs intraday. Retesting the overnight lows isn”t otherwise necessary, but they would be unlikely to hold, and more likely to back-and-fill on the way down to retest Thursday afternoon”s “lower prior highs” at 2083.50.

First Trade…
Exiting the open at 9:45 under 2096.00 would be unlikely to trigger this morning”s 2102.00 bias-up signal at 10:15, and likelier at least to test the 2092.50 bias-down signal. Exiting the open above 2104.50 would be likely to trigger the 2102.00 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…
Friday”s gap up extended to probe nearly 7 points above Wednesday”s 2099.75 FOMC reaction peak. The post-open rally extended through the noon hour. No higher high printed through the afternoon”s bias environment, which warned of impending weakness, since the session was already an uptrending Friday. A sell signal triggered under 2104.25 and bottomed 5 ticks short of its potential to 2096.00, still closing back under Wednesday”s high.

Overnight action”s new info…
Sunday night”s opening 5 minutes surged 6 points to 2106.00. The balance of the night drifted back down to 2100.00, and then dropped sharply to attack 2095.00 and 2094.00, and now also 2093.00. Each attack reacted up to 2097.50. The latest bounce is retesting it, too — and then some, up to 2098.25.

If, then…
Buyers gained no traction Friday, so gapping up is the only reliable path to resuming the rally today. That seems unlikely with a flat open currently indicated. There being a weekend in between, probing above Friday”s high anyway would get a benefit of the doubt. But nothing would marginalize sellers, and a fresh high would be vulnerable to reversing back down. Meanwhile, not rallying out of this morning”s open would be likely to resume the slide back to Thursday”s “lower prior highs.”

First Trade…
Exiting the open at 9:45 above 2102.50 would be likely at least to test the 2104.50 bias-up signal, but exiting the open above Friday”s 2106.75 high is needed to make the bias-up signal likely to trigger at 10:15. Similarly, exiting the open under 2096.00 would be likely at least to test the 2094.00 bias-down signal, but under 2092.00 at 9:45 would make the bias-down signal likely 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)

Last night”s Training Session
“Strategy & Tactics” is linked here

Through the prior close…
Thursday”s session was spent exclusively in negative territory. Bias-down triggered late, and after already having tested its bias-down target. But the bias-down target was retested, and eventually probed by a couple of points. Firming through the noon hour wasn”t retraced, but the afternoon only ranged choppily sideways. No unfinished business was left outstanding.

Overnight action”s new info…
There was never any momentum to initially probing under yesterday afternoon”s choppy range. Yesterday morning”s 2076.50 lows were attacked to within 5 ticks. That hesitation soon ended, and the balance of the night has trended back up to now pierce yesterday morning”s 2089.50 post-open high.

If, then…
Yesterday morning”s post-open high formed in reaction to having tested support at its bias-down target. That high was strong enough resistance to prevent further recovery, and to force a retest of the bias-down support. Testing it now can also be considered a test of this morning”s 2088.00 bias-up signal. Not only triggering bias-up, but also gapping up and immediately extending higher, may be today”s only path to resuming the rally. This being a Friday when the morning”s bias signal tends to persist through the noon hour, probing Wednesday”s highs is not unlikely. There is no particular bearish consequence to this pattern not maintaining a gap up — worse, the balance of the session might only repeat yesterday afternoon”s choppy sideways ranging.

First Trade…
Exiting the open at 9:45 above 2090.25 would be likely also to trigger the 2088.00 bias-up signal 30 minutes later at 10:15. Exiting the open back under 2086.50 would be much less likely to trigger bias-up.