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 night”s slide had held at Wednesday morning”s 2027.00 bias-down target. Not until the moment the bias environment began lapsing was the selling pressure rejected by a surge that filled the gap back to Tuesday”s 2036.50 close. All of the elements for a Wreversal Wednesday were outweighed by the afternoon”s “ineffectual pessimism” that repeatedly held the gap”s resistance. So, closing above 2034.25 merited holding long through the close.

Overnight action”s new info…
Initial weakness touched the 2033.50 pullback limit of Wednesday”s hold-long setup. Rallying from there probed Wednesday”s highs by midnight, eventually surging to new highs at 2043.25 .A 5-point dip was recovered to momentarily pierce the high.

If, then…
Probing under Monday afternoon”s lows without gaining traction had created the potential for sharply higher highs. “Ineffectual pessimism” had prevented Wreversal Wednesday from recovering into positive territory, which made follow-through Thursday likely. Despite overnight action fulfilling those influences, intraday uptrending isn”t any likelier today than at any other point during this two-week rally. Gapping up in this pattern remains vulnerable to reversing down intraday back under the prior session”s low — a moving target that has gotten to be pretty deep (dashed red line on chart). The overnight highs are a “new Globex trend extreme,” so exiting the open above or under their interim low (labeled on chart) should dictate this morning”s direction.

First Trade…
Exiting the open at 9:45 above 2042.75 would be likely also to renew the bias-up signal by exceeding its 2041.25 bias-up target through 10:15. Exiting the open back under 2038.00 would be likely to exceed the bias-up target, and would start threatening not to trigger the 2036.50 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…
New highs up to 2039.00 overnight had reacted down through Tuesday”s open to 2031.00. Veteran”s Day holiday volume inhibited new sponsorship, so the dip”s test of Monday afternoon”s lows was recovered. But only up to 2037.75 — still a new high, but under the 2039.00 “new Globex trend extreme” that requires intraday retest. The balance of the session narrowed its range. Monday”s 2035.00 high essentially held as resistance at every relevant timing window.

Overnight action”s new info…
Globex wasted little time retracing Tuesday”s last-minute surge to 2037.50. Retracing, and then reversing back under Tuesday”s low to 2028.25. RSIs diverged positively into its test.

If, then…
Monday afternoon”s trend change warning had held Tuesday morning”s test as support. Its test was recovered back above Monday”s high, so there was no bullish reason to revisit Monday afternoon”s low — which last night”s slide proves. Recovering this overnight probe to open back above yesterday”s lows would turn this lemon into lemonade, putting back into play a test of Monday night”s “new Globex trend extreme.” Opening under yesterday”s lows wouldn”t necessarily trend down immediately. But any bounce it launched would originate from a position of weakness to make it only temporary.

First Trade…
Exiting the open at 9:45 under 2028.25 would be likely also to renew the bias-down signal by also exceeding its 2027.00 bias-down target through 10:15. Exiting the open above 2034.25 would be unlikely to trigger the 2032.75 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…
One 10-minute surge defined Monday”s session. It originated from a choppy open, peaked upon retesting last week”s “new Globex trend extreme,” and then ranged sideways through the close. Resisted by 2034.25-2035.00, buyers didn”t gain traction for their efforts. It was the first time during this week-old rally that three consecutive timing windows traded exclusively above all prior intraday highs.

Overnight action”s new info…
Another rally leg into midnight extended to 2039.00. Its reaction down to 2034.25-2035.00 formed a Triangle that has broken higher to attack 2039.00.

If, then…
Yesterday”s last three consecutive timing windows hovered above all prior intraday highs. This setup tends to develop at or near trend changes — either the traditional trend change that reverses direction, or the possible trend change of steeper slope. Room for noise above the setup is being tested overnight. Gapping up, or not, will be predictive to today”s ultimate behavior.

First Trade…
Exiting the open at 9:45 under 2032.00 would be unlikely to trigger the 2035.25 bias-up signal at 10:15. Exiting the open above 2039.50 would be likely to renew the bias-up signal by also exceeding its 2040.25 target through 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…
Thursday night”s “new Globex trend extreme” at 2032.75 had been retraced to greet Friday”s Employment Situation report from 2026.00. Its knee-jerk reaction up pierced the overnight high by 3 ticks and reacted right back down. Friday”s open was greeted back at 2026.00, which was just enough strength to avoid reversing the trend down. So, dipping further past the open was reversed up from 2021.00 to a fresh post-open high at 2031.00. A late-afternoon dip was also largely recovered to 2028.50.

Overnight action”s new info…
In keeping with the theme above, another dip has been recovered, from 2021.00 to 2029.50. Also in keeping with the above theme, the recovery hasn”t resumed the trend.

If, then…
If recovering almost 9 points from the overnight dip isn”t being rewarded by fresh highs through the open, then the overnight dip will likely be revisited. And revisiting the overnight dip will likely extend down. That dip should be somewhat obvious at the open. So, not yet dipping at the open would still be within the orbit of Thursday night”s “new Globex trend extreme” at 2033.50, making its retest.

First Trade…
Exiting the open at 9:45 above 2032.75 would be likely also to trigger this morning”s 2029.00 bias-up signal at 10:15. Exiting the open back under 2021.00 would be likely to trigger the 2022.00 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…
The market will always go where the market wants to go. Yesterday”s example of that was the eventual test of 2028.25, the morning”s bias-up target. Putting it into play was all but assured — that “all but assured” referring to the potential for reacting to an unfavorable headline. That was the Russia-Ukraine news, which triggered the morning”s slide. But that was also a test of the 2011.25 bias-down signal, whose test launched a rally through the balance of the session… all the way up to 2028.25. Buyers gained traction in the process, exiting the bias environment above the noon hour”s high, and entering the final hour trending above both.

Overnight action”s new info…
The trending extended up to 2032.75, with complexity that makes it a “new Gobex trend extreme” requiring an intraday retest. That was already reversing ahead of Europe”s opens, and the entire extension has been retraced down to 2025.50.

If, then…
With buyers having gained traction yesterday, reversing immediately must begin by gapping down. Any shallower weakness would be likely to recover. Rather than being bearish, the reaction down from last night”s highs suggests that optimism is being tempered and not getting overdone from a contrarian perspective. Of course, this morning”s Employment Situation report will trigger a reaction. What”s left from that reaction at the open will be more predictive of the session.

First Trade…
No preliminary levels are available ahead of Employment Situation reports.