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 opening 25-point slide to 2015.25 ended before the morning”s bias environment began. Its reaction up to 2029.25 ended before the morning”s bias environment ended. The balance of the session essentially drifted back down to attack the low. Oversold RSIs were left outstanding.

Overnight action”s new info…
Narrow ranging started giving way into Europe”s opens, but a blip-down to 2020.00 has extended its reaction up to attack 2036.00.

If, then…
This morning”s open might intend to ignore all of Monday”s pattern and simply rally back into Friday”s range. Monday”s sellers gained no traction, so gapping up is credible for reversing the trend. But it is not a fait accompli, and might only refuel sellers if post-open action fails to extend high enough or fails to hold a pullback to support — levels that can be calculated from the opening print. In fact, the overnight rally might be fading already. Opening back under the overnight gains would already create momentum for quickly returning to yesterday”s lows.

First Trade…
Exiting the open at 9:45 above 2034.00 would be likely also to trigger the 2031.50 bias-up signal at 10:15. Exiting the open back under 2029.00 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…
Friday”s pre-open Employment Situation report was greeted from Thursday”s test of targets above 2052.00. The knee-jerk reaction up held only through the opening ticks up to 2061.00 before plunging 30 points to 2031.00. But downtrending was isolated only the morning”s bias environment. The balance of the session bounced up to 2047.00, which reacted down to 2038.00 into the cash session close.

Overnight action”s new info…
Friday”s late reaction down to 2038.00 had extended to almost 2033.00 after the cash session close. Sunday night”s open retraced that last leg momentarily. Rallying into Europe”s opens has extended higher, retracing the rest of Friday”s late decline from 2047.00.

If, then…
As we discussed during this weekend”s Saturday Review, Friday”s singular isolated downleg did not necessarily prove that last week”s correction had ended. Immediately retracing Friday”s late decline — as is currently indicated — would further undermine the correction scenario. The open is still 90 minutes away. And even the scenario for resuming the rally would still allow this morning to retest Friday”s lows first.

First Trade…
Exiting the open at 9:45 above 2044.00 would be likely also to trigger the 2045.00 bias-up signal 30 minutes later at the 10:15 bias timing window. Exiting the open under 2037.00 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…
Thursday morning followed its template for working higher to the corrective rally”s next higher target, which was 2052.00 since the open had already fulfilled 2044.00. No higher objective would be consistent with the rally being only a correction that is retraced to recent lows. Intraday patterns had created room for noise up to 2055.50 and 2058.25, and each was met and held through successive timing windows. But the late pullback only came within 3 ticks of 2052.00, instead of closing under it, which would have helped to confirm a corrective rally was ending.

Overnight action”s new info…
Thursday”s late slide extended to and through 2052.00. Narrow, choppy ranging around it has only recently blipped-down momentarily attack 2047.00.

If, then…
Having touched 2055.50 and 2058.25 intraday, closing above them would have invalidated the current rally as being only a temporary correction. Since only they were rejected, and 2052.00”s recover may have held, closing above 2055.50 and 2058.25 today could still invalidate the correction and put into play new highs. The burden of proof is on sellers to react down decisively under 2052.00, even if that path were to first probe temporarily above yesterday”s highs.

First Trade…
No preliminary levels are considered ahead of the Employment Situation report.

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 morning”s buyers that had absorbed the morning”s probes under 2011.50 were rewarded immediately at the bias environment exit. But its 17-point surge to 2022.00 resistance defined the upper-end of the afternoon”s three consecutive timing windows, which ranged sideways into the close

Overnight action”s new info…
Firming back to 2022.00 was given a boost by dovish overnight Fed comments. A 17-point surge to 2038.50 was retraced 8 points at its low. Recently another surge has probed fresh highs up to 2041.00.

If, then…
By avoiding the rally”s next target at 2029.00 yesterday, there became a high degree of likelihood that its test would easily give way to the next higher targets. The latest surge has come within 3 points of the first at 2044.00, and the next is 2052.00. Regardless, the overnight rally creates the same caveat as at yesterday”s quick test of its bias-up target — neutralizing the upside attraction would be vulnerable to a post-open pullback, even if only temporarily.

First Trade…
Bias-up parameters are already exceeded considerably. Exiting the open at 9:45 above 2036.75 would help to keep the rally”s next higher target in-play at 2044.00. Back under 2031.50 through the open would be unlikely to also exceed the 2029.00 bias-up target at 10:15.

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 drop bottomed within 3 ticks of the decline”s 1983.50 target. Two buy signals triggered before the bias environment began lapsing. “Unfinished business above” at 2011.50 was attacked to within 2 ticks. The last half-hour retraced 61.8% of the recovery, back down to 1994.00 support.

Overnight action”s new info…
.Yesterday”s late retracement is almost fully recovered to within 2-3 ticks of 2010.00.

If, then…
Significant selling pressure was met at yesterday”s lows, which tested and held targets. Optimism was restrained during yesterday afternoon”s relatively shallow bounce. “Unfinished business above” is left outstanding. Extending the rally should be easy — so easy, that not extending it would suggest a much bigger decline is unfolding.

First Trade…
Exiting the open at 9:45 under 2000.00 would be unlikely to trigger the 2011.50 bias-up signal. Exiting the open above 2014.25 would be likely to trigger bias-up.