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…
Sunday night’s 20-point gap up to 2783.50 had extended overnight to 2814.00, testing the three-week old high session’s range. Resistance there pushed back to greet the open at the 2798.00 earlier Globex low, which didn’t hold, forming a Globe-flip setup. The setup triggered Monday morning’s decline. The decline’s minimum likely target was the actual morning low at 2773.50, a 61.8% retracement between Friday’s cash session close and Monday’s opening print. A bounce up to 2790.25 was largely retraced through the afternoon bias environment. Closing lower would have signaled the Globex-flip would also influence Tuesday morning — bouncing to 2793.00 went out overlapping the afternoon high, neither reinstating the bearish Globex-flip nor terminating it.

Overnight action’s new info…
The Still overlapping the afternoon high blipped-up momentarily after the close to 2794.50. Trending down from there through midnight probed fresh lows attacking 2767.00. Bouncing back above yesterday’s low into Europe’s opens up to this morning’s 2780.25 bias-up signal. Correcting it with a 61.8% pullback is now bouncing again to attack 2784.00.

If, then… (notes to accompany the Tour recording)
REMINDER: I’M UNAVAILABLE BY NOON. PM BIAS PARAMETERS SHOULD BE AVAILABLE, BUT NO OTHER UPDATES UNTIL THIS EVENING… Gapping down under Monday’s low would suggest the Globex-flip is being reinstated by proxy. Lower lows have potential to 2763.00, but probably no lower before bouncing to keep alive the rally’s momentum. Any deeper would overlap Friday’s cash session “lower prior highs” when optimism needs to remain intact. None of which is indicated currently. If overnight selling has only stretched the rubber band to snap back up, fresh highs up to 2818.25-2823.00 would be in-play, albeit not necessarily today. Volume will diminish — probably less so than pre-weekend or pre-holiday evaporation, but still inhibiting sponsorship..

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2784.25 would be unlikely to trigger the 2780.25 bias-down signal at 10:15. Exiting the open under 2777.25 would be likely 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…
Thursday night’s dip was contained well within the intraday range, but still capable of derailing the rally. A pre-open surge avoided opening too low, and avoided confirming that Thursday’s late dip back under Wednesday’s high had gained traction. The minimum reward or consequence to retest Thursday’s high was done Friday afternoon, following two no-bias environments that could hardly wait until lapsing to probe their bias-up signals. The behavior wasn’t overly optimistic as to be bearish from a contrarian perspective, and suggested the rally is credible for extending higher. Closing above Thursday’s high put into play the next higher objective at 2768.00-2770.00, and extending higher post-close came within almost 3 points.

Overnight action’s new info…
Weekend developments from the G20 included a Trump-China trade truce, or at least a cease fire. That’s the highest-profile among other slightly less prominent developments elsewhere globally that have replaced recent and near-term unknowns with predictability. Sunday night’s 2793.50 Globex open gapped up nearly 30 points — 37 points from Friday’s cash session close equivalent —  and extended to almost 2810.00. Natural resistance there from a 3-week old gap at prior highs initially held. Its pullback to 2798.00 was recovered by fresh highs up to 2814.00 into Europe’s opens. That was brief, as another dip is back under earlier highs testing 2795.50.

If, then… (notes to accompany the Tour recording)
Suddenly, the recovery we’ve been weighing has become obvious to all. And as suddenly, its correction back down comes to the forefront. Having established higher targets at Friday’s close and entrenching the rally, there was already vulnerability to dipping Monday morning. Weekend developments may be too recent to serve as a catalyst that attracts an influential degree of retail players. A post-open higher high can’t yet be discounted, but it wouldn’t tolerate much dissent before rolling over into a correction that lasts through Tuesday morning. And having probed the prior session’s high, a Globex-flip setup could form if the cash session’s open were maintained back under the 2798.00 earlier Globex low. The sad passing of President George H.W. Bush has introduced a closed session on Wednesday, which affects trading decisions and the market’s timing. Avoiding any bearish setups this morning — including the rejection of probing overnight highs — could form a short-squeeze up instead of correction fown.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2798.00 would have potential for testing this morning’s 2773.00 as support.

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 night’s shallow slide had tested 2729.00 at its late low. Bouncing to 2740.00 in reaction to a Trump/China trade tweet was reversed to probe fresh lows attacking 2723.00. Exiting the bias environment back above its entry isolated the probe, and reversed momentum up to greet the afternoon’s FOMC Minutes just under Wednesday 2745.00 high. Its reaction up to 2-week old highs at 2754.50 was retraced entirely as the final hour dipped back under the noon hour’s 2742.00 high to test the afternoon bias environment’s 2738.00 low.

Overnight action’s new info…
Thursday’s late low supported a sideways narrowing range developed into Europe’s opens. Then support gave way. Trending to fresh lows has just touched what is this morning’s 2729.25 bias-down target.

If, then… (notes to accompany the Tour recording)
Thursday’s rally gained traction by exiting the bias environment above the noon hour’s high and entering the final hour even higher. Closing any lower — back under the bias environment’s low instead of just testing it — would have invalidated the upside traction. Unless the open has also retraced Thursday morning’s low, retesting Thursday’s high is still possible this morning — if not also trending above it. The overnight dip isn’t helping that bullish setup, and the bias-down target test could be the line in the sand that shifts post-open trending back down. This being a Friday, the morning’s bias signal tends to persist through the noon hour.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2734.75 would be likely to trigger the 2736.75 bias-down signal at 10:15. Exiting the open above 2741.00 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 gap up soon stalled at 2698.00 instead of extending higher, let alone almost literally exploding higher. Which made the morning likely back-and-fill. It also made the open a position of strength likely to attract an eventual recovery. Backing-and-filling was testing 2684.00 when the first hour ended. Firming into noon greeted the embargo being lifted on Fed Chair Powell’s remarks. The reaction literally exploded higher to 2728.00 during the noon hour, trending up to 2745.00 during the final hour. The day began by testing ‘higher prior lows” from last Tuesday, and ended by attacking 1-1/2 week old highs.

Overnight action’s new info…
Shallow downtrending had dipped back to yesterday afternoon’s prior high down to 2734.50 before midnight. The downtrending has persisted down to 2728.75 — still just probing under yesterday afternoon’s prior high, but now also retracing 61.8% of yesterday afternoon’s last dip.

If, then… (notes to accompany the Tour recording)
Confidence that a bottom is forming isn’t nearly is high since yesterday’s explosion was delayed past the open. But the burden of proof was on sellers so long as yesterday’s open had gapped up to allow room for a morning dip, and the burden of proof remains on sellers despite the overnight dip. Last night’s relentless dip is vulnerable to reversing up as the overnight crowd covers, unless the open fails to recover from under a relevant support — relevant support has so far held at the 2728.75 61.8% retracement of yesterday afternoon’s last dip. There’s still room for noise below it on a retest, but its failure would reverse down intraday and potentially target “lower prior highs” at 2707.00.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2726.00 would be unlikely to recover the 2727.75 bias-down target at 10:15 and renew the bias-down signal. Exiting the open under 2731.00 would be likely at least to trigger the 2734.75 bias-down signal at 10:15. Exiting the open above 2740.50 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…
Especially volatile overnight action preceded Tuesday’s open. None of which reversed momentum down and only chipped away at resistance. Two overnight dips to 2655.00 had been interrupted by a spike up to 2684.00. Similarly, the post-open dip to 2655.00 was also recovered, back above both bias-down parameters by 10:15 which put into play offsetting tests of both bias-up parameters. The balance of the session climbed back up to eventually attack the overnight high within 1-3 ticks. The morning’s 2686.00 bias-up target remained outstanding.

Overnight action’s new info…
Tuesday’s recovery was probing fresh highs through the close. Globex immediately fulfilled the outstanding target and touched 2688.75 as resistance. A pullback to 2681.00 was recovered to fresh highs at 2692.50. Its reaction down to 2683.00 through Europe’s opens was fully recovered, and now another reaction down has recovered by spiking up to fresh highs attacking 2696.00.

If, then… (notes to accompany the Tour recording)
Coiling and restrained optimism in probing above Monday’s highs suggested that extending higher at all would almost literally explode higher. Subdued gains would suggest instead a rubber band stretching, before it snaps back down. Gapping doesn’t qualify as exploding higher. So, not extending higher aggressively post-open would remain vulnerable to snapping back down. “Lower prior highs” and the gap back down to yesterday’s close would offer support, so that a reaction down could still recover and resume the rally.

First Trade…
[Click here to view the Bias parameters] Exiting the open above 2696.50 would be likely also to exceed the 2694.75 bias-up target through 10:15 to renew the bias-up signal. Exiting the open at 9:45 above 2691.75 would be likely to trigger the 2688.00 bias-up signal at 10:15. Exiting the open under 2686.00 would be unlikely to trigger bias-up.