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…
Monday morning’s gap down tested 2899.00 and soon recovered back up to being unchanged from Thursday’s 2908.50 close. Ranging narrowly flat-to-higher out of the bias environment still continued overlapping 2908.50. Finally breaking free in the last half-hour surged to 2912.75, just enough for Monday not to be a clean “inside day.”

Overnight action’s new info…
Although Monday’s late surge to 2912.75 was largely retraced before the close, it was immediately extending just a little higher to 2915.00 after the close. That only stretched the rubber band, as an even deeper retracement soon extended down to 2908.00. Its reaction only attacked 2915.00 before dropping back down to 2909.00 through Europe’s opens — which continues to be tested as support.

If, then… (notes to accompany the Tour recording)
Fluctuating overnight around yesterday’s close may seem neutral, but its underlying optimism is preventing Monday’s late surge from reversing down. Not yet extending higher isn’t surprising, as was noted at the time, the internal breakout’s timing reflected weak-handed sponsorship. Not so weak-handed that it can’t attract reinforcements, but so weak-handed that not attracting reinforcements would face the likely consequence of retracing yesterday’s recovery from 2899.00. At least. Extending higher this morning without delay would confirm yesterday’s late breakout attempt, targeting fresh highs at 2926.50-2928.00. Meanwhile, having only ranged sideways overnight, the timing of breaking out from the range will be predictive. Regardless of direction, breaking out within 60-90 minutes of the open tends to be false, at least initially if not also ultimately.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2911.75 would be unlikely to trigger the 2914.75 bias-up signal at 10:15. Exiting the open above 2908.50 would be unlikely to trigger the 2906.00 bias-down signal.

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…
The ongoing series of intraday distribution remained alive and well going into Easter/Passover weekend. As did the ongoing series of gapping up. Thursday’s open was greeted near the end of a 22-point rally from overnight lows to 2911.75. Almost all of its 17-point retracement down to 2895.00 was done during the session’s first hour. Sellers failed 2-3 attempts to convert that retracement into a reversal, which told us to expect the drop’s recovery. And it was, to within 1 tick, while the afternoon ranged choppily sideways around 2910.00 into the close.

Overnight action’s new info…
Sunday’s open gapped down momentarily a little to 2907.50, then spiked up 5-points to probe fresh highs attacking 2916.00. Nice try. It was all errant ticks above the 2914.25 bias-up signal, which held its retest. A 13-point collapse down to 2901.00 suddenly found itself consolidating under Friday afternoon’s range. A bounce to 2907.50 has resolved back down to 2901.00.

If, then… (notes to accompany the Tour recording)
Two or three bearish setups are threatening to greet the open. The week’s final afternoon of choppy sideways ranging didn’t provide optimal confirmation to the bearish WedEX. Nor was it invalidated. Nevertheless, regardless of gapping up, trending down through the first half of Monday’s opening 15 minutes of volatility would get a benefit of the doubt for trending down aggressively through the balance of the morning. The downside would be helped by completing a bearish Globex-flip setup, after the overnight probe above Friday’s highs is rejected back under Sunday night’s 2907.50 earlier Globex low. And that could trigger the bias-down signal just 6 ticks lower. Meanwhile, recovering in time to avoid the Globex-flip, and any other of the bearish setups, could be as bullish as they otherwise would have been bearish — likely to probe higher highs, not only to Wednesday’s 2923.00 gap up, but also its room for noise up to 2926.50-2928.00.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2903.50 would be likely to trigger the 2906.00 bias-down signal at 10:15. Exiting the open above 2910.00 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…
Tuesday night’s rally from 2911.50 had been contained within Tuesday morning’s drop, but it extended to greet the open above Tuesday’s highs at 2923.00. The ongoing intraday distributive pattern did what patterns do, and once again reversed momentum down. This time was sudden, steep and substantial, producing the outside day that Tuesday’s reversal stopped short of being. The open touched Tuesday’s 2904.50 low, and the several more lows extended to 2898.50 through the afternoon’s bias environment. A pre-close bounce to 2906.50 started failing into the close.

Overnight action’s new info…
Wednesday’s slide wasn’t just a domestic incident. It set the tone for Asia and Europe time frames, too. Already failing into Wednesday’s close, the decline eventually collapsed down to 2895.00 and then extended down to 2892.00 by midnight. Firming 5 points through Europe’s opens suddenly reacted down to 2889.50. But only momentarily as its reaction has snapped back up, testing the resistance of yesterday’s “higher prior lows” up to 2902.00. That’s also testing unchanged, which is also resistance.

If, then… (notes to accompany the Tour recording)
Other than yesterday’s intraday reaction down from the open’s fresh high, the market has not been in a multi-session decline. A bullish Isolation setup cannot form. So, opening back above yesterday’s low, and isolating its probe to the overnight, wouldn’t necessarily earn the reward of retesting yesterday’s highs — retesting yesterday’s highs will require a different setup, like gapping up back above yesterday’s 2908.50 afternoon bias environment high. Meanwhile, trying to form an Isolation setup when an Isolation setup won’t qualify diminishes the current recovery attempt. It keeps alive the potential for an intraday retest of 2892.00-2894.00 “lower prior highs” that was tested overnight. Regardless, rallying or declining this morning will find thinning afternoon volume makes it difficult to extend the morning’s trend, and easier to retrace some or all of it before the close.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2903.50 would be unlikely to trigger the 2899.00 bias-down signal at 10:15. Exiting the open under 2897.50 would be likely to trigger bias-down. Exiting the open under 2892.00 would be likely to exceed the 2894.00 bias-down target at 10:15 to renew the bias-down signal, next targeting 2889.25.

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…
Tuesday’s gap up to 2919.25 from a (two-day) multi-session range. Intraday reinforcements weren’t attracted to replace the relentless overnight trend’s retiring sponsorship. Similar to previous gaps up and intraday rallies, Tuesday’s fresh high quickly attracted overwhelming sellers that trended back down relentlessly into the last half-hour’s 2904.50 low. Its reaction recovered to test Monday’s 2910.00 close — which was still being overlapped up to 2912.00 at the close. Both the 2919.25 open’s gap up above all prior highs, and the 2921.25 pre-open “new Globex trend extreme,” were left outstanding, still requiring a retest.

Overnight action’s new info…
Several hours of sideways ranging between 2909.00-2913.00 suddenly spiked up to 2918.00. And then it gradually retraced back down to 2913.00, which held through midnight. Price action since then has steadily crept higher, and is now attacking 2918.00 to within 2 ticks.

If, then… (notes to accompany the Tour recording)
I’m reminded of the recent move, “A Quiet Place.” The trick to rallying post-open is not to make any noise that will get its sponsorship noticed. Gapping up by too much would once again be likely to attract distribution that pushes price back down. But gapping up within yesterday’s range — and not already reversing back down under a relevant level through the opening 15 minutes of volatility — would be likely to resume and extend the overnight rally through the morning. Likely objectives of yesterday’s opening print and pre-open highs could be probed up to 2926.50-2928.00 before the monsters sellers recognize strength to sell into. Otherwise, retracing too much of the overnight gains could also alert sellers that the bounce has already failed, and selling into it could fuel at least a retest of Tuesday’s low.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2916.75 would be likely to trigger the 2914.50 bias-up signal at 10:15. Exiting the open under 2912.00 would be unlikely to trigger bias-up.

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…
Monday morning’s open was the market’s version of “bait & switch.” After only ranging sideways Sunday night, Monday’s open was greeted flat with Friday’s close. But all of that complacency suddenly gave way to a post-open decline. Attacking the morning’s 2906.00 bias-down signal to within 1 tick through 10:15 didn’t trigger it, but it was invalidated by breaking lower through 10:30. Sellers were rewarded down to 2900.50, taking 1-minute and 3-minute RSIs simultaneously oversold. Bouncing out of the noon hour retested Friday’s 2910.00 gap up, which was still being tested at the close.

Overnight action’s new info…
Monday afternoon’s recovery continued without delay at the Globex open, but incrementally, which still qualifies as relentless. A blip-up attacked the 2914.50 prior night’s high and retraced back down to 2910.00. Another blip-up after midnight to 2916.50 was retraced back down to 2913.00. Having chipped away at resistance, Europe’s opens was soon followed by a surge to 2920.00-2921.25, which has been fluctuating around the 2919.00 bias-up target for several hours, forming a “new Globex trend extreme” that is often retested the same day.

If, then… (notes to accompany the Tour recording)
Monday morning’s collapse stopped short of touching last week’s “lower prior highs” at 2898.00 and lower. This disqualified the afternoon’s recovery from neutralizing Friday’s 2910.00 open above all prior highs. So, a downleg wouldn’t yet be credible for extending. Meanwhile, the shallow dips reflected that optimism remained high. No matter how bearish that is from a contrarian perspective, impatient buyers are often rewarded anyway — just not by nearly as much as anticipated. So, probing fresh highs had become likelier before first dipping any deeper, having stopped short twice Friday afternoon and Monday morning. Fresh highs remain vulnerable to rejection, although gapping up does make that window brief again like Friday. Unlike Friday, the overnight rally should resolve in one direction or the other immediately and/or more substantially. I describe these routes specifically in the Market Tour recording.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2920.50 would be likely also to exceed the 2919.00 bias-up target at 10:15 to renew the bias-up signal, next targeting 2926.50-2928.00. Exiting the open above 2915.00 would be likely at least to trigger the 2913.00 bias-up signal at 10:15.