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…
Tuesday”s gap up was corrected during the morning”s bias environment, but there was nothing corrective after that. The rally resumed into the noon hour, and out of the bias environment, stopping short of touching Friday”s intraday high. The position-squaring window dipped, but the session still ended higher than Friday”s close. And the rally gained traction for its effort, exiting the bias environment above the noon hour”s high and entering the final hour even higher.

Overnight action”s new info…
After rallying 22 points from Tuesday morning”s low, a 5-6 point slide has kept overnight action trending down throughout.

If, then…
The overnight slide is attacking yesterday”s ~2057.00 bias environment exit. It can be probed without reversing the trend down, so long as the probe isn”t maintained through a relevant timing window. Limiting the pullback would likely probe fresh highs this morning, rewarding yesterday”s rally for having gained traction. This is developing against the backdrop of a Eurozone finance ministers discussing Greece. Like price action, headlines have been downplaying the potential for positive news. But that doesn”t prevent lower lows, even if only as a temporary detour to new highs.

First Trade…
Exiting the open at 9:45 above 2061.75 would be unlikely to trigger the 2059.50 bias-down signal at 10:15. Exiting the open above 2064.50 would be likely at least to test the 2067.25 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…
Monday didn”t produce the recovery that the pattern suggested would be likely after temporarily extending Friday afternoon”s decline down to 2044.50. The decline extended temporarily Sunday night, but its recovery was held to a break-even at 2051.50. The afternoon”s lower low down to 2036.50 didn”t gain traction wither, recovering back into the overnight range. “Unfinished business above” at 2055.75 was created by the morning”s no-bias environment. So, sellers didn”t gain traction despite trying, while buyers created a higher target without really trying.

Overnight action”s new info…
Narrow ranging at 2043.50-2046.00 had firmed to almost 2048.00 ahead of Europe”s opens. A dip to 2041.00 was recovered back to the initial range”s upper-end. Then Europe blinked — news (i.e. trial balloon) of a 6-month extension for Greece just triggered a 12-point, 12-minute surge to 2059.00.

If, then…
The attraction to unfinished business above at 2055.75 is now neutralized. Thursday”s cash session and futures closes (2055.50-2057.50) represent last week”s high close, and they”re now being retested as resistance. These are all resistance, and trending up will be difficult without entering a timing window above them. Don”t forget the pattern of trial balloon headline, market reaction that gauges its acceptance, then actual details. This morning”s headline may be valid, but it has yet to be validated, which will be treated as an separate news item.

First Trade…
Exiting the open at 9:45 above 2053.00 would be likely also to exceed the 2055.75 bias-up target through 10:15 to renew the bias-up signal. Exiting the open under 2050.75 would be unlikely to trigger the 2049.00 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…
Friday”s favorable knee-jerk reaction to the pre-open Employment Situation report was largely retraced before the open. The cash session rallied back to it, and through it, hovering into the noon hour. But the afternoon was essentially the opposite — trending back down into negative territory. The upper-end of the 2041.00-2044.00 target area was attacked to within 2-3 ticks. Bouncing into the cash session”s close at 2050.50 extended nearly 6 points higher.

Overnight action”s new info…
Sunday night”s 2050.00 open immediately returned Friday”s post-close extension. Then the 2041.00 target was met. Its reaction up to 2047.00 (where I sent an overnight update) was reversed to a fresh low at 2039.50. Its 6-point bounce back up to Friday”s low was retraced entirely, but no lower — at least, not yet. Meanwhile, the Euro”s non-reaction (small circle) to an unbending Greece and a doubtful Greenspan has also reversed (much, much bigger circle).

If, then…
The Euro”s reversal down seems relatively bigger than the ES. They”re timing isn”t in synch, but ES is bouncing again back up to Friday”s 2044.50 low, while the Euro is extending lower. Their relationship has changed a little from earlier, but the door remains open to ES reversing up this morning — although now with a likelihood of one more fresh low actually testing this morning”s 2039.00 bias-down target.

First Trade…
Exiting the open at 9:45 under 2041.00 would be likely also to exit the bias timing window at 10:15 under the 2039.00 bias-down target, which would renew the bias-down signal. Exiting the open above 2050.50 would be unlikely to trigger the 2044.00 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…
Except for a drop through the noon hour, Thursday”s session rallied higher through the day. And that followed gapping up to retrace most of Wednesday”s late plunge, which had extended even lower overnight. Although the bias environment exit and final hour”s entry reflected no momentum, the last half-hour surged to almost touch the 2059.00 upper-end to the ongoing channel.

Overnight action”s new info…
Thursday”s last half-hour surge was gradually retraced before midnight. That retracement was gradually recovered into and out of Europe”s opens. A shallower dip has been recovered, too, forming an Ascending Triangle with two hours still remaining before monthly payrolls is announced.

If, then…
The market”s underlying upward bias seems strong enough to absorb an initially negative knee-jerk reaction to this morning”s pre-open Employment Situation report. But it might not be strong enough to maintain an initially favorable reaction, since yesterday afternoon”s key timing windows lacked traction. The Friday Factor may be more relevant today than any other influence.

First Trade…
No preliminary levels are considered ahead of an Employment Situation report. These will be updated during the pre-open Market Tour.

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 down held its bias-down signal. The offsetting test of its bias-up signal was fulfilled at the morning”s 2046.25 high, which probed 2 points into positive territory. Consolidating back into negative territory at 2036.00 never gained traction. In fact, rallying out of the bias environment”s exit came to within 2-3 ticks of the afternoon”s 2049.75 target. Having originated too late to be strong-handed, and having fulfilled buying pressure, negative ECB-Greece news triggered a 20-point plunge to fresh session lows attacking 2030.00 before the close.

Overnight action”s new info…
The plunge extended down immediately to 2022.50. Sideways ranging between 2021.00-2027.50 formed an Inverted Head & Shoulders. The pattern broke higher into Europe”s opens. Yesterday morning”s 2046.25 was just attacked to within 1 tick.

If, then…
The plunge began too late to invalidate the relevant action of two consecutive mornings that had rejected sellers. The recovery I described during Market Wrap is exceeding my minimum expectation for 2041.00. It may have gotten ahead of itself by already testing this morning”s 2044.50 bias-up target. But the potential for extending higher still outweighs the trend reversing down.

First Trade…
Exiting the open at 9:45 above 2042.00 is likely also to exceed the 2044.50 bias-up target through 10:15 to renew the bias-up signal. Exiting the open under 2034.00 would be unlikely to trigger the 2038.25 bias-up.