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 gap up both fulfilled Monday”s “ineffectual pessimism,” and neutralized all outstanding “unfinished business above.” Coming within 3 ticks of testing Monday”s outstanding 2021.25 bias-up target then reacted down and extended without hesitation to 2008.75. Flat-to-higher ranging back to 2018.00 momentarily blipped-up another point before the close.

Overnight action”s new info…
Dipping gradually down to 2012.25 has been recovered back up to 2018.00. That is reacting down now to 2014.50.

If, then…
While all unfinished business above has been neutralized, there remains potential to test 2022.00. Neutralizing the other attractions has been done almost grudgingly, keeping alive pessimism that could be bullish from a contrarian perspective. So, the proximity to 2022.00 makes it less resistant to a probe higher. At least, that will be the premise of any probe higher, until it is retraced too deeply.

First Trade…
Exiting the open at 9:45 above yesterday”s 2019.75 open would be likely also to have tested the 2022.75 bias-up signal. Being more likely to trigger bias-up at 10:15 will need to have exited the open above 2021.00. Exiting the open under 2013.50 would be likely at least to test the 2011.25 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…
Tuesday morning”s bias-down had tested and probed its target down to 1995.25, but selling pressure was contained within that window. Forming a Symmetrical Triangle into the bias environment”s exit, and rallying through the entire noon hour, found a peak upon testing the 2007.00 open”s gap down. Sideways ranging through the afternoon attacked 2009.00, reversing back into the range instead of recovering positive territory.

Overnight action”s new info…
Ranging under 2007.00 began breaking higher as election results trickled out. Trending peaked within 1 tick of this morning”s 2015.50 bias-up target. A 7-point dip through Europe”s opens has recovered, now attacking Monday”s Sunday night”s 2018.25 to within 5 ticks.

If, then…
Until news is known to be favorable or unfavorable, it is unknown. That”s why trending can be more responsive to just getting the news behind it. Last night”s election results fulfilled anticipations that were widely disseminated. And the bigger attraction above — including unfinished business — has resumed its relevance. Until meeting the 2021.25 and 2022.00 objectives, almost any post-open selling will likely recover.

First Trade…
Exiting the open at 9:45 above 2013.50 would be likely to renew the bias-up signal by also exceeding this morning”s 2015.50 bias-up target through 10:15. Exiting the open under 2013.50 would put the 2010.00 bias-up signal in jeopardy.

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…
Monday morning”s high barely pierced Friday”s range by 1 tick up to 2016.00, then reversed back into it down to 2008.00. Monday afternoon”s higher high at 2018.25 neutralized prior Globex trend extremes, then reversed back down to 2008.00. The reversal began too late to invalidate the afternoon”s bias-up signal, leaving “unfinished business above” at its 2021.25 bias-up target. Overbought RSIs at 2018.25 require a retest, too.

Overnight action”s new info…
Like a battleground state poll, overnight action has fluctuated widely and repeatedly between negative and positive territory. Each fluctuation has probed a new extreme. A surge that coincided with Europe”s opens touched 2013.75. That was soon reversed down to fresh lows at 2005.00… Crude Oil has wasted no time extending down since yesterday”s break under 79.75 confirmed 77.44 and 75.40 targets are in-play, already dropping to within 50 cents of the latter.

If, then…
Two pieces of unfinished business above didn”t prevent yesterday afternoon”s slide, so it wouldn”t prevent this morning from extending down further. First,  2006.00 must break through a relevant timing window, after having held three tests overnight. So far. Opening back in positive territory would be likely to extend up at a steep pace and retest yesterday”s highs up to 2022.00. Still struggling at the open would be difficult to avoid dipping to 1989.50. Although trending during election days isn”t common, a temporary 15-point intraday probe would not be unusual.

First Trade…
Exiting the open at 9:45 under 2003.75 would be likely also to trigger this morning”s 2006.00 bias-down signal. Exiting the open above 2013.50 would be likely to trigger the 2015.50 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…
Despite gapping up to new highs, pessimism remained alive and well. Friday”s gap up began retracing immediately. Its 10-12 point dip held the 2003.00 (+/- 2 ticks) preliminary support through 9:45, marginalizing sellers. A bounce stopped short of touching prior highs, and the balance of the session ranged sideways. Other pessimism included the gap up stopping short of retesting September”s 2014.50 outstanding “new Globex trend extreme,” let alone Thursday night”s 2016.75 new new Globex trend extreme.

Overnight action”s new info…
Sunday night”s open was essentially flat with Friday”s 2011.25 close. Touching Friday”s last-minute 2012.50 high reacted down, recently as low as 2007.00. Meanwhile the Nikkei has surged another 600 points. Europe is ranging flat-to-lower, too

If, then…
It”s a little late not to indicate a gap down if an Island Reversal were forming. Still ranging sideways much past the open would become too late to extend Thursday night”s rally this morning. So long as Friday afternoon”s 2004.75 lows aren”t touched, the open remains vulnerable to testing and probing unfinished business above, up to 2022.00.

First Trade…
Exiting the open at 9:45 under 2006.00 would be likely at least to test the 2003.75 bias-down signal. Exiting the open above 2011.00 would be likelier to at least test the 2013.50 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…
Yes, or no… The outstanding attraction back to 1984.25 cut both ways. First, it encouraged the morning”s rally after an overnight dip had held the same 1966.00 support as Wednesday”s FOMC reactions. Then, it attracted a probe up to 1994.00 back down to it. Closing above it attacking 1990.00 came too late with no complexity, leaving unanswered whether 1984.25 was holding or being exceeded.

Overnight action”s new info…
Ummm, exceeded maybe? Ranging around 1990.00 suddenly surged to 2004.00 on news of the FOMC being unfashionable. Not only is no one following their lead, but quite the opposite — Bank of Japan both increased its QE program and widened eligible securities.The initial surge extended another 12 points to attack 2017.00, probing both the 2012.25 prior intraday high and 2014.50 “new Globex trend extreme.” Its reaction down has held the surge”s original 2004.00 peak.

If, then…
No “new Globex trend extreme” left behind. Add last night”s 2016.75 to those now outstanding. They are historically mandated to be retested intraday. So, the Sep 18 2014.50 overnight high remains on that list, too. Their retest is not satisfying buying pressure, so they are not resistance. But retesting a prior extreme does introduce vulnerability to reversing direction. (Note that the levels identified below with “+/-” mean to include the range that is 2 ticks either way.)

First Trade…
Exiting the open at 9:45 above 2003.00(+/-) would be likely to extend to 2022.00(+/-), with room for noise above it to 2025.75(+/-). Opening under 2003.00(+/-) would be likely at least to test this morning”s 1996.25 bias-up target.