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…
Wednesday”s gap up didn”t retrace all of Tuesday”s late break, and the open eventually resolved in a fresh low at 2032.00. Its recovery attempt into the noon hour at 2040.500 failed back down to 2032.00, as did another recovery attempt. The last failure probed slightly lower to 2030.75, ending the cash session at 2032.00.

Overnight action”s new info…
A retest of 2030.75 launched a rally back up to 2040.50. Its reaction is down has tested and retested 

If, then…
[FRONT-MONTH ROLLS FORWARD AT TODAY”S OPEN TO JUN (M)]. Yesterday”s repeated probes under prior lows all stopped short of their potential to 2029.75 (2037.00 basis Mar). That optimism can be bearish from a contrarian perspective, making 2029.75 vulnerable to being probed considerably. While its test probably can no longer be avoided, it can be delayed by gapping up and through above yesterday afternoon”s 2041.00 high to try forming a “session-long rally” setup.

First Trade…
Exiting the open at 9:45 above 2043.00 would be likely also to trigger the 2040.50 bias-up signal at 10:15. Exiting the open under 2037.00 would be unlikely to trigger bias-up, and above 2037.00 at 9:45 would be unlikely to trigger the 2029.25 bias-down 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 open gapped down 17 points to a new low, immediately fulfilling the decline”s 2060.00 target. The morning”s extended down to test the next lowest target at 2048.50, which then supported flat-to-lower ranging through the afternoon. That is, until the position-squaring window ended. The session”s last several minutes plunged to 2041.25

Overnight action”s new info…
Immediately rallying until retracing Tuesday”s late plunge then corrected into Europe”s opens. Higher highs reached 2052.25. Its reaction down is now testing the late plunge”s 2048.50 origin as support. By several ticks.

If, then…
Having trended down into yesterday”s close, gapping up above yesterday afternoon”s 2054.25 high would form a “session-long rally” setup. That has been attempted to within 4 points, which isn”t yet close enough to consider a failed attempt. That would invert the potentially bullish setup into being bearish. Meanwhile, 2048.50 and 2056.00 are big lines in the sand that can define whether the decline extends next to 2037.00, or begins a big recovery attempt.

First Trade…
Exiting the open at 9:45 under 2047.75 would be unlikely to trigger the 2053.25 bias-up signal at 10:15. Exiting the open above 2055.00 would be likely to trigger bias-up. And exiting the open under 2043.50 would be likely at least to test the 2041.00 bias-down 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…
Monday”s open gapped up from Friday”s test of the 2066.00 target. The morning”s bias-up signal was neither triggered nor rejected, which is a rare “noN-bias.” So was the afternoon”s bias, an even rarer one-day combination. That”s as much buying pressure as can be expend without gaining traction for the effort, and just enough to avoid attracting sellers. The anticipated template for a temporary bounce fulfilled only its bounce portion.

Overnight action”s new info…
Selling resumed immediately, dipping 3 points to 2075.50. A drop at midnight attacked Monday”s 2072.00 open. Despite ranging narrowly through Europe”s opens, the decline resumed one hour later — now fulfilling the template”s other portion by testing its 2060.00 target by 5 ticks.

If, then…
Yesterday I noted that the temporary bounce template was being slow-played, and a near-term probe under Friday”s low couldn”t be avoided. Saturday I had noted that the fresh low could form a bottom if it were not delayed. While Monday did delay the fresh low, its overnight test can be associated with Monday — which COULD still allow a near-term bottom to form. Relentless overnight trending can reverse sharply at the open, but usually not if the reversal hasn”t happened during the opening sequence.

First Trade…
Exiting the open at 9:45 back above 2072.00 would be the earliest indication that the 2065.75 bias-down signal might not trigger at 10:15. Exiting the open under 2064.25 would be likely also exceed the 2065.75 bias-down target through 10:30, which would renew the bias-down signal. Its renewed bias-down target at 2060.00 is already being tested pre-open, but its next lower targets would be 2056.00 and 2048.50.

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 down on the pre-open payrolls report had fulfilled the morning”s 2088.00 bias-down target. But its 2095.50 bias-down signal never recovered. The first hour”s ranging gave way through the morning to test 2079.25 support. And that gave way through the afternoon to fulfill the day”s 2066.00 target. The cash session close firmed to 2069.00, and futures drifted nearly 3 points higher.

Overnight action”s new info…
Initial strength was soon retraced, and then extended, so far all the way back down to touch 2066.00.

If, then…
Fulfilling selling pressure so near the close prevents counter-trend sponsorship from gaining traction. That all but ensures probing lower lows, unless the open were to gap up sufficiently. Having held the target through one close, probing lower intraday would be vulnerable to recover. 

First Trade…
Exiting the open at 9:45 above 2076.50 would be likely also to trigger the 2074.00 bias-up signal 30 minutes later at 10:15. Exiting the open under 2070.00 would be unlikely to trigger bias-up. Exiting the open under 2064.25 would be likely to trigger the 2065.75 bias-down 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…
Thursday”s gap up didn”t reach the 2103.50 pre-open high before reversing to fill the gap back down toward Wednesday”s 2096.00 close. Its reaction up made a lower high before reversing again into the noon hour, and almost 3 points into negative territory. Its recovery spent the balance of the session ranging choppily in positive territory, centered around Wednesday”s 2099.00-2099.75 highs.

Overnight action”s new info…
Narrow sideways ranging between 2098.00-2101.00 largely defined price action until only moments ago. A sudden 3-1/2 point surge from between 2099.00-2099.75 just attacked yesterday”s 2103.50 pre-open high to within 2 ticks.

If, then…
Overnight fluctuation ahead of the monthly Employment Situation report is often only noise. Sentiment tends to be contrarian to the actual reaction. Yesterday”s range was too narrow relative to the prior day, and this pre-open surge is too late relative to the news, for either to be considered reliably as sentiment. Maintaining a gap up would have potential back to the highs, or at least to launch a sizable morning rally. But a gap up would be vulnerable to reversing down until outlasting the opening 15 minutes of volatility. And gapping down would be vulnerable to extending through the close.

First Trade…
There are no preliminary levels ahead of an Employment Situation report, which is due momentarily.