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 opening dip held a test of the 2065.50 bias-down signal, putting into play an offsetting test of the 2070.00 bias-up signal. The balance of the morning ranged flat-to-higher. The balance of the cash session trended slightly higher to fulfill the target. A late surge probed it by a couple of points. A post-close reaction down to 2069.00 surged even higher to 2073.00.

Overnight action”s new info…
Globex action quickly extended to 2075.25. That reacted down Wednesday night to 2068.25. Its recovery to 2074.25 was consolidated last night, until Europe”s opens. That triggered another reaction down even further to 2066.00.

If, then…
Crude Oil”s drop on the OPEC (lack of) agreement is only partially responsible for the overnight reaction down. Extending higher into and out of Wednesday”s close is a bigger cause. S&Ps are actually flat-to-higher compared to Wednesday”s cash session close. Unless the open is trending quickly, today”s abbreviated session could be choppy, but otherwise uneventful.

First Trade…
Exiting the open at 9:45 above 2072.75 would be likely at least to test the 2074.00 bias-up signal. There”s a gap there back to yesterday morning”s Globex close, so triggering bias-up at 10:15 won”t be any likelier without also having recovered 2075.00 through 9:45. Exiting the open under 2065.50 would be likely also to trigger the 2067.75 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…
Reacting down Tuesday from early strength never quite recovered… Monday night”s rally to a new high at 2073.00 was retested at Tuesday”s open. Its reaction down put into play 2062.00, which was met to within 3 ticks. Bouncing back to 2070.50 during the noon hour reacted down again as the range narrowed further through the afternoon.

Overnight action”s new info…
More early strength, another reaction down… Firming back up to within 1 tick of Tuesday”s 2073.00 high has reacted back down under the afternoon”s high to 2068.00.

If, then…
The pre-holiday liquidity drain is inhibiting trending. This isn”t a narrow range, and we”re currently at its upper-end. So, unless a rally were to break out early, then the likelier “trend” is down. That doesn”t mean a test of support will break, or will break easily — sometimes the path down begins with a failed probe above resistance. Regardless, of the potential to traverse the range, be careful not to force a trade, since narrow ranging is also an option.

First Trade…
Exiting the open at 9:45 above 2071.50 would be likely also to trigger the 2070.00 bias-up signal at 10:15. Opening under 2062.00 would be likely to trigger the 2065.50 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…
Gapping up 5 points to 2066.50, and surging through the first 2-3 minutes to 2069.00, perfectly duplicated Friday”s open. Again, the immediate reaction was to reverse down sharply. The duplication started ending there, as Monday”s reversal was shallower, dropping only to 2064.25. And the balance of the session ranged sideways instead of firming through the afternoon. The noon hour”s retest of 2064.25 bounced back 3-4 points into the close, leaving “unfinished business above” at the morning”s 2071.50 bias-up target.

Overnight action”s new info…
Blipping-up to 2069.00 was reversed back to Monday afternoon”s lower-end, which again recovered to Monday afternoon”s upper-end. And then higher. Finally, coming to within 3 ticks of 2071.50.

If, then…
The unfinished business above at 2071.50 isn”t neutralized, yet. The 3-tick proximity applies only to intraday tests. Similarly, the overnight hesitation just under it is not necessarily pessimism. Assuming that it is tested, the high of the leg that tests it will be vulnerable to reversing down, no less abruptly than Friday”s test of this area. Not reversing down abruptly could be an early warning that sellers are marginalized, at least for a couple of timing windows as the rally extends.

First Trade…
Exiting the open at 9:45 above 2071.50 would be likely also to trigger this morning”s 2069.25 bias-up signal at 10:15. Exiting the open under 2065.50 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…
After rallying relentlessly overnight, Friday”s open fulfilled a reversal setup off of 2072.25. The expiration session”s opening 15 minutes trended down to signal the reversal would extend through the noon hour. The afternoon”s bias timing window lapsed at 2054.75. That was still well into positive territory, and the balance of the session firmed up to 2063.00. Oversold RSIs at the low were left outstanding, as well as the the 2071.50 opening print.

Overnight action”s new info…
Sunday night”s open firmed briefly, but mostly ranged sideways narrowly. Bounces into and out of Europe”s opens have essentially ranged around this morning”s 2065.50 bias-up signal.

If, then…
Extending Friday afternoon”s bounce through this morning”s open would almost ensure retesting Friday”s open before any downleg could form. The alternative would be as likely to trend down until probing back under prior highs. The latter, bearish scenario would also suggest triggering this morning”s bias-down signal.

First Trade…
Exiting the open at 9:45 under 2061.25 would be likely at least to test the 2058.00 bias-down signal by 10:15, which would be likely to trigger if the open were exited under 2056.25. Exiting the open above 2068.75 would be likely to trigger the 2065.50 bias-up signal 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…
Early to bed, early to rise… Thursday”s gap down to Wednesday”s 2038.00 low began recovering immediately. Not triggering bias-down had put into play a test of the 2050.75 bias-up signal. It was met before the morning”s bias environment began lapsing. The balance of the afternoon ranged around it down to 2047.00-2048.00 and up to 2052.00.

Overnight action”s new info…
.Thursday”s pattern opened the door to probing new highs. But, wow… Sideways ranging around Thursday”s highs began trending higher at midnight, and didn”t hesitate until 2059.50. A 2-1/2 point 1-1/2 hour dip launched a 10-point spike up on news of China easing its interest rates. Ranging since then has formed a Symmetrical Triangle centered around 2065.00.

If, then…
Immediate is too late… Rejecting Thursday”s gap down immediately was too late to form a stable base for launching a durable rally. But its recovery had earned the attempt to rally. China”s news exploited that vulnerability. What surprises may bring, expiration often takes away. Gapping open on expiration tends to take one of two paths, either extending the gap relentlessly or else reversing it aggressively. More often it is the latter, but becomes much less likely if the open isn”t trending back down obviously.

First Trade…
Exiting the open at 9:45 under 2060.50 would be likely also not to exceed the 2058.50 bias-up target through 10:15. Exiting the open under 2056.00 would also be likely at least to test the 2052.25 bias-up signal as support.