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…
Friday morning’s rally missed the opportunity to complete a retest of Wednesday’s 2907.50 low. The overnight attack on it to within 2 ticks also missed the opportunity. Enough of a recovery before the open allowed a little dip to test Thursday’s 2912.00 close. Its reaction held a test of the 2916.25 bias-down signal to put into play an offsetting test of the 2924.50 bias-up signal, which the morning’s high tested by 1 point. The afternoon ranged choppily flat-to-lower. Friday’s close again (barely) recovered 2919.00 for a second consecutive session. This keeps alive the That’s a different pattern, but the consequence should be to retest the prior Friday’s highs. And there would have been consequences to not recovering it, and/or to closing under 2914.00..

Overnight action’s new info…
Sunday night’s open spiked up 5-1/2 points on the afternoon’s news of a US-Canada trade agreement. Fluctuating around Friday’s 2925.50 high soon resolved up and probed Thursday’s 2932.00 high. The overnight high is currently 2937.75, which is the high cash session close from the prior Thursday, one session prior to the intraday high.

If, then… (notes to accompany the Tour recording)
Monday’s open is indicated to gap up above both last Friday and Thursday AND Wednesday’s 2925.50, 2932.00 and 2936.00 highs. Only 2925.50 was necessary for reversing the trend up by proxy. But if 2936.00 (or only 2932.00) is tested during the open, then ITS recovery will be the threshold, and not exceeding it through the open would reverse momentum back down — even if only for the morning, down to lower prior highs at 2928.50-2930.00. All of which is possible because relentless overnight trending often loses its sponsorship at the open. A pre-open dip would help to relieve that. Also, being triggered not only by news, but by paradigm-shifting news, the open may succeed at attracting reinforcements. And attracting reinforcements can extend to new highs at 2947.50, including last Friday’s 2945.25 opening gap up.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2932.25 would be likely also to exceed the 2930.75 bias-up target at 10:15 to renew the bias-up 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…
A durable bottom all but requires probing under Wednesday afternoon’s 2907.50 plunge lows. That didn’t prevent Thursday’s open from gapping up to and through what had been “lower prior highs” at 2914.00, and extending above the critical 2919.00. Extending higher didn’t invalidate the downside requirement, either. And the extension was substantial, persisting through the bias environment, into and out of the noon hour up to 2932.00. Dropping 15 points from there down to 2917.00 expended a lot of selling pressure in a short time frame, and avoided closing under 2919.00. But Thursday afternoon’s sellers gained traction — exiting the bias environment under the noon hour’s low and entering the final hour even lower — keeping alive Thursday afternoon’s selling pressure into Friday morning.

Overnight action’s new info…
Thursday’s late bounce up to 2922.00 was immediately retested at the Globex open. It extended to within 1 tick of this morning’s 2924.50 bias-up signal. Things have changed greatly since then. An aggressive drop through Europe’s opens probed under yesterday’s afternoon’s low to 2915.00. Its reaction up has fallen to lower lows under yesterday morning’s low at 2911.75.

If, then… (notes to accompany the Tour recording)
Closing back above 2914.00 and (barely) 2919.00 creates a position of strength to help recover from lower lows. Which will be needed, because the traction gained by Thursday afternoon’s drop makes Friday morning likely to trend lower. Overnight lows are only now testing yesterday morning’s low, so the Isolation setup is probably moot. Meanwhile, probing under Wednesday’s 2907.50 low has room to 2900.75 while still being likely to recover 2914.00 and 2919.00 through the close. Closing much lower than that would threaten to extend deeper into next week.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2915.50 would be likely to trigger the 2916.25 bias-down signal at 10:15. Exiting the open above 2919.00 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 bounce had attacked 2929.00 before dipping into Wednesday’s open. After holding a dip to almost 2920.00, another bounce got to 2930.00 ahead of the FOMC policy statements. Its reaction extended up to 2936.00. And that was the end of that. Dipping into the bias environment exit plunged through the Fed Chair’s Q&A through the final hour down to 2907.50. “Lower prior highs” at 2914.00 was tested, and maintained its break, as did 2919.00.

Overnight action’s new info…
Literally, overnight action has ranged sideways. Gradually firming into the Globex session eventually attacked 2916.00 just before midnight. That was retraced gradually back down to touch yesterday’s 2907.50 low through Europe’s opens, as they essentially played “catch-up” to discount yesterday’s late U.S. plunge while they were closed. In the briefer time since then, 2916.00 has been retested, and is still being tested now.

If, then… (notes to accompany the Tour recording)
Exiting Thursday’s open above 2914.00–2919.00 would be optimal for a morning bounce, albeit probably not durable. Launching a durable rally would be premature. The pattern’s next lower attraction is 2900.25. Closing under 2919.00 has significantly threatened to become a more substantial drop, which would be validated more so by maintaining the decline’s steepness, and less so by simply closing lower. A recovery would likely begin gradually, and not necessarily be obvious or gain confidence soon. In either case, a probe under yesterday’s low is likely — the sideways overnight range may seem stable, but at this stage it is no more a reflection of strength than was yesterday’s last-minute narrow ranging at the low.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2917.00 would be likely to trigger the 2915.50 bias-up signal at 10:15. Exiting the open under 2914.00 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…
Failing to gain traction during the afternoon doesn’t prevent trending from extending the next morning. But it requires that extension to begin by gapping. Monday afternoon’s buyers had failed to gain traction up to 2925.25, so Monday night’s bounce tried to extend the rally into Tuesday morning. But the overnight bounce up to 2934.25 peaked upon filling the gap back up to Friday’s close. Its reaction greeted Tuesday’s open back at Monday’s highs, where bouncing immediately could have resumed the rally, but the reversal only continued. The critical 2919.00 support was probed twice Tuesday afternoon but held its recovery through the close.

Overnight action’s new info…
Tuesday’s last test of 2919.00 had reacted up into the 2921.00 close, and continued higher into the Globex open. Not even a consolidation interrupted the rally until eventually attacking 2829.00, where a pullback dipped to 2924.50 through Europe’s opens. Flat-to-higher ranging since then has been hovering pessimistically short of the high.

If, then… (notes to accompany the Tour recording)
Gapping up only above Tuesday’s 2928.25 noon hour high would be optimal, but still would qualify for gapping up into a morning rally. That may be moot by the market open, as hovering pessimistically short of the high is potentially bullish from a contrarian perspective. So, breaking yet higher before the open would be credible for extending higher through the morning. Anxiousness ahead, this time ahead of the afternoon’s FOMC events, could restrain price action again into and out of the noon hour.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2927.75 would be likely to trigger the 2926.75 bias-up signal at 10:15. Exiting the open under 2925.25 would be unlikely to trigger bias-up.