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…
Greeting Tuesday’s open in rally mode wasn’t bearish; nor was gapping up. But already fulfilling the doubly-renewed bias-up up target did increase potential for backing-and-filling, if only because the rally had room for a correction without damaging the chart. The open missed a couple of opportunities to resume the rally, so the pullback began. But it extended into Monday’s range (probing under the overnight low) when the rally needed the pullback to stop optimistically short. And a late bounce back above Monday’s high settled back under it to render Tuesday’s optimism as ineffectual. A second-day confirmation to Monday’s recovery attempt failed its own attempt. But similar to Monday’s recovery that had stopped short of closing above a prior high, Tuesday’s reversal avoided closing under a prior low, keeping momentum in flux.

Overnight action’s new info…
Tuesday’s 2621.50 low had printed during the afternoon bias environment, which was exited in rally mode. Its 2661.00 peak was already reversing down into the close and got to 2628.00. Price action since then has trended up relentlessly, probing yesterday’s late bounce up to 2667.00 — and threatening to gap up above Monday’s highs.

If, then… (notes to accompany the Tour recording)
The burden of proof is back on buyers. Tuesday’s otherwise normal pullback extended too deep when China trade war rhetoric hit the headlines. Its influence on price is already retraced, so its attraction above is already neutralized. Recovering it again through the open could be credible for resuming Monday’s rally effort. Meanwhile, the overnight bounce is a function of more China trade war headlines, and not maintaining its gain through another timing window would indicate more vulnerability to sellers regaining control.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2651.50 would be unlikely to exceed the 2655.00 bias-up target through 10:15 and renew the bias-up signal. Exiting the open above 2649.50 would be likely at least to trigger the 2645.75 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 <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close…
Monday’s open was greeted by a recovery up to 2645.00 from Sunday night’s 23-26 point probe into negative territory down to 2909.50. Half of the earlier loss was under Thu-Fri’s lows. Actually, the recovery was already failing, struggling to hold unchanged. A post-open blip-up retraced 61.8% of the pre-open dip, and the failing resumed. Overnight lows were attacked, and then probed 20 points October’s 2603.00 prior low to 2583.00. Oversold RSIs at the low were left outstanding as the balance of the session reversed back up to probe the pre-open high up to 2648.50. The close maintained the afternoon’s trending series of higher highs and higher lows.

Overnight action’s new info…
Backing-and-filling through midnight fell to 2638.50-2630.00, where trending would have reversed down intraday. Its support held as the range narrowed into and out of Europe’s opens. A rally suddenly developed almost 2 hours later, now 2 hours old, trending up relentlessly 30 points to 2665.00. A China trade headline finally claimed to confirm Trump’s previously tweeted car tariff reduction is being implemented. A reaction down after the headline has been followed by a confirming news story, resuming the rally to fresh highs attacking 2670.00.

If, then… (notes to accompany the Tour recording)
PROGRAMMING NOTE: I’M AWAY FOR TODAY’S LAST HALF-HOUR, SO MARKET WRAP WILL BE HELD EARLY. Is trending higher in the past couple of hours finally resolving Monday’s likeliest template? It was binary, likely either to resume the decline or else to bottom. The decline tried to resume by probing new lows, that ultimately were recovered. The recovery into positive territory did not to close above a prior high. A bottom needed more evidence to be credible — not just intraday, but through the close — and meanwhile remains vulnerable to resuming the decline. A “session-long decline” setup is off the table by not gapping down. The current overnight rally creates room to absorb selling pressure without yet reversing momentum down, so the rally gets a benefit of the doubt so long as no reaction down even threatens negative territory.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 back under 2650.25 would be unlikely to trigger the 2652.25 bias-up signal at 10:15. Exiting the open above 2657.25 would be likely to trigger bias-up. Exiting the open above 2667.00 would be likely also to exceed the 2662.50 bias-up target at 10:15 to renew the bias-up signal next targeting 2672.00-2675.00.

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 Employment Situation report was greeted in negative territory, but its reaction attacked Thursday’s 2699.00 closing high pre-open. A little post-open relief rally into positive territory was likely regardless of its resolution. Almost immediately attacking the 2711.00 bias-up target to within 5 ticks began reversing down almost immediately. And then relentlessly. The final hour was greeted 86-1/2 points lower attacking 2623.00. The final hour’s reaction stopped 4 points short of 2656.00 which could have signaled sellers were waning. Closing above 2626.00 (at 2633.50-2636.00) avoided signaling a new lower target is in-play.

Overnight action’s new info…
Sunday night’s Globex open gapped down to 2625.00, just above Friday’s low, then probed lower to attack 2610.00. Down 23-26 points, probing fresh low, all before the first hour had lapsed. That was also the low. Hovering in a narrow range up to 2621.00, and under Friday’s lows started breaking higher into Europe’s opens, first attacking and later testing 2632.00. Stopping pessimistically short of unchanged, still too early to be considered bullish from a contrarian perspective.

If, then… (notes to accompany the Tour recording)
Not formally putting into play the next lower objective (October’s 2603.00 low) didn’t equate to ending the decline, let alone to reversing the trend back up. Friday’s close was in the process of retesting Thanksgiving’s prior low, for which there already is no bullish reason. Its eventual break and a retest of 2603.00 is inevitable, but the path or paths aren’t yet set. Isolating last night’s probe under Friday’s range would suggest another detour has entered the path down, at least for this morning if not also through tomorrow morning. Meanwhile, the likelier template is that the decline is awaiting the intraday session — more likely, just its appearance over the horizon — before resuming.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2625.25 would be likely to trigger the 2628.25 bias-down signal at 10:15. Exiting the open above 2635.50 would be unlikely to trigger bias-down.

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…
Wednesday’s illiquidity had certainly exacerbated Tuesday’s otherwise valid break under 2763.00. That same illiquidity probably contributed to Wednesday night’s unusual open that saw the first minute plunge 71 points. Its reaction never recovered, and Thursday morning extended down to 2614.00. That was at the morning’s bias environment exit, and the balance of the session trended back up to 2699.00. That took the day’s loss to single digits, but positive territory wasn’t recaptured, and no traction was gained for all that effort. A couple of important levels did hold their tests — room for noise down to 2656.00, and the 2626.00 Thanksgiving prior low. Oversold RSIs were left outstanding at the low.

Overnight action’s new info…
Globex has drifted lower since yesterday’s close, eventually greeting Europe’s opens at 2670.00 “lower prior highs” from earlier yesterday. Its reaction has peaked twice at 2685.00.

If, then… (notes to accompany the Tour recording)
Does the overnight dip’s pessimism supersede the optimism of yesterday’s late surge, ahead of this morning’s Employment Situation report? Actually, neither has gained traction that would offer any predictive value. The bigger question seems to be not how the market will react, but whether trending into the weekend is waiting for the reaction to pass. A knee-jerk reaction down to 2656.00 and/or 2626.00 that holds through the open or through the morning could resume yesterday afternoon’s recovery. Failing to hold their retest could similarly resume Thursday morning’s decline. Friday Factors could exacerbate either setup.

First Trade…
[Click here to view the Bias parameters] No preliminary levels are considered ahead of an Employment Situation report.

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 drop was already underway at the open’s gap down to 2782,00. It wasn’t yet destined to actually break lower, having room down to 2763.00. Even a perfect storm of negative headlines and Trump’s tariff tweet could have been absorbed normally. But Wednesday’s impending illiquidity exacerbated their effects. And as difficult as it is to generate sponsorship before a closed session, it’s difficult to stop sponsorship that gets generated. The break became a plunge to 2697.00 at the close, recorded as 3.2% on the day.

Overnight action’s new info…
Bouncing to 2721.00 ahead of Wednesday morning’s close was followed by a 7-point gap down. Which spiked down 71 points to 2650.00. Its reaction soon tested 2690.00 and formed a symmetrical triangle that has gradually resolved down to attack the spike’s low at 2651.00.

If, then… (notes to accompany the Tour recording)
Recovering from Tuesday’s exacerbated slide would have been more bullish than first extending down to the room for noise at 2656.00. A recovery is still possible, but we’ll have to make that judgement this afternoon. Meanwhile, two days of illiquidity aren’t quite so impending as they will be tomorrow, but it’s not really a liquid environment if everyone is a seller. This open should be no less volatile than any from last week, so an early position may not be possible.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2726.00 probably also fails to recover the 2686.00 bias-down target, renewing the bias-down signal at 10:15.