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 morning”s drop to 2038.00 was recovered eventually to probe positive territory. But only so far as to retrace Tuesday afternoon”s downleg back to 2050.50. And that was only in a momentary knee-jerk reaction to the FOMC Minutes. No traction was gained either by buyers or sellers, since the bias environment”s exit and final hour”s entry both returned back into the noon hour”s 2043.00-2045.00 range.

Overnight action”s new info…
Initial firming soon resolved back down to 2043.00. Ranging there eventually gave way to probing back under Wednesday”s 2038.00 low — which is being tested now.

If, then…
Wednesday was neither bearish nor bullish, which was bearish, because Tuesday”s breakout wasn”t confirmed. Holding a test of the prior range”s “lower prior highs” could be bullish, if the test were to resolve up without delay Thursday and Friday. That happens more often when the test is delayed until after confirming the breakout. There is no bullish reason to retest Wednesday”s 2038.00 low, not during a relevant timing window. So, not already rejecting this overnight dip before the open would itself be bearish.

First Trade…
Exiting the open at 9:45 back above 2044.75 would be unlikely to trigger the 2040.00 bias-down signal at 10:15. Exiting the open under 2038.00 would be likely to trigger bias-down.

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…
Rallying at Tuesday”s open and through the open fulfilled the morning”s 2047.75 bias-up target, piercing it by 1 tick. Its reaction down was recovered into the noon hour and through the noon hour. The afternoon”s 2054.25 bias-up target was met within 1 tick. A late sell signal triggered as price declined into the cash session close at 2050.00 and through it to the 2048.00 futures close.

Overnight action”s new info…
Don”t sleep, you”ll miss it… Tuesday”s late sell signal targeted 2045.50. It was met as Europe”s exchanges opened, and then exceeded by 1 point. Price action since then has recovered to 2049.50, essentially unchanged.

If, then…
Tuesday”s trend change warning could still be invalidated by resuming the rally and closing above Tuesday”s high. Extending its late drop overnight doesn”t prevent that, but it doesn”t leave much time to delay it. And initially rallying would still be vulnerable to attracting more of the same selling pressure that was attracted late yesterday.

First Trade…
Exiting the open at 9:45 above 2051.50 could be enough to make the 2051.00 bias-up signal likely to trigger at 10:15. Opening under 2047.25 would be likelier to trigger the 2045.50 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…
Having recovered enough to open back above Friday”s 2032.25 low — despite having probed 7 point under it Sunday night — Monday morning extended the recovery until touching Friday”s 2039.75 high. A reaction back down to Friday”s low was also recovered entirely, and Monday”s last two timing windows ranged narrowly at the high. The 2038.00 bias-up signal was not rejected, so its 2043.00 bias-up target became “unfinished business above.”

Overnight action”s new info…
Monday afternoon”s narrow ranging had only narrowed, supported by 2038.00. A sudden spike up to 2042.25 was reversed back into the range, and through it to attack 2036.00. A brief bounce was reversed to retest 2036.00, where another bounce has returned to unchanged.

If, then…
Vulnerability is to the upside, as suggested by Sunday night”s failed pre-open dip, and by Monday”s recoveries only retesting prior highs. While it is correct to interpret the prior highs as being strong resistance, that only tells us a lot of energy must be expended to break higher — it doesn”t tell us the resistance will prevent a break higher, only that the break higher will likely be brief. First things, first — probes into negative territory should be absorbed entirely pre-open again to avoid a morning dip back to yesterday”s lows.

First Trade…
Exiting the open at 9:45 above 2043.00 would be likely also to trigger the 2041.75 bias-up signal at 10:15. Exiting the open under 2037.00 would be unlikely to trigger bias-up, and should at least test the 2034.25 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…
Friday morning”s range felt even wider than the 7 points it covered between 2032.50-2039.50. Four swings each stretched almost the entire range. The afternoon slowed the pace, but didn”t shrink the range. Another swing down through the noon hour and into the bias environment”s exit was recovered yet again back to the morning”s highs. But the cash session close was still testing 2035.00, and futures extended to 2039.50 resistance.

Overnight action”s new info…
So much for choppy swings. Sunday night”s Globex open immediately rejected the post-close probe above 2035.00. The rejection extended under Friday”s 2032.50 low — and under Thursday”s 2027.00 lows — to 2025.25. The 10-14 point drop was retraced temporarily back up to 2035.00 through Europe”s opens. But Friday”s lows haven”t been recovered.

If, then…
Friday morning”s wide-ranging choppiness on any other day would have produced trending through the afternoon. The overnight dip both suggests as much, while also satisfying the breakout potential. But unless Friday”s low remains broken through the open, another recovery to Friday”s upper-end would be likely. Maintaining the break under Friday”s low through this morning”s open could put the market on defense through tomorrow morning.

First Trade…
Exiting the open at 9:45 under 2031.75 would be likely also to trigger the 2030.00 bias-down signal at 10:15. Exiting the open above 2039.50 would be likely to trigger the 2040.25 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…
Wednesday night”s new highs up to 2043.75 had been retraced back down under Wednesday afternoon”s highs testing 2035.00. But Thursday”s open quickly rallied back up to the overnight highs. A deeper reaction down probed under Wednesday morning”s lows to test 2027.00. Thursday”s last 60-90 minutes bounced back to test 2035.00, narrowly avoiding a trend change signal.

Overnight action”s new info…
Choppy sideways ranging has been centered around 2035.00.

If, then…
There is no “new Globex trend extreme” outstanding that requires being retested intraday. The only near-term structural attraction is below, at the oversold RSIs which printed during Thursday”s 2026.75 low. Not that its support is anything more substantial than “obligatory,” but there is little if any support below it. Regardless, this being a Friday, if any trending does get underway, it would be likely to extend through the noon hour.

First Trade…
Exiting the open at 9:45 under 2030.00 would be likely also to trigger the 2029.00 bias-down signal at 10:15. Exiting the open above 2043.00 would be likely to trigger the 2041.50 bias-up signal.