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 afternoon’s bullish WedEX influence wasn’t. A “new Globex trend extreme” had formed overnight, which was neutralized by piercing it 6 ticks up to 2947.00 during the pre-open minutes. Although that had avoided the earlier threat of a Globex-Flip setup under 2938.00, the morning dipped back down to 2938.50. Other than gapping up, bouncing to 2944.00 was the only bullish behavior. But that reversed  down just when the WedEX’s influence should have pushed price higher. Quite the opposite, the afternoon resolved down to its 2932.50 bias-down target through the expiration close.

Overnight action’s new info…
Saturday we discussed whether Friday’s post-open decline was defensive posturing ahead of Monday’s new tariffs on China. Even if already fully discounted, a knee-jerk reaction to the news would be normal. So, Sunday night’s gap down to 2929.50 wasn’t surprising or unusual. A pattern soon formed that targeted 2921.25-2923.00, and its upper-end was touched. Bouncing back into the range held up through Europe’s opens, inspiring confidence for retesting the open’s gap up to 2930.00. That has formed an Ascending Triangle.

If, then… (notes to accompany the Tour recording)
Lower price doesn’t necessarily equate to traction. We applied that to Friday afternoon’s shallow relentless drop back to 2836.00 support — lower lows were probed too late to be relevant. We’re now applying it to last night’s gap down. Unless selling pressure exits a window under a relevant level to gain traction, it is actually pent-up buying pressure. We’re not relying on the WedEX to be  influential this morning if it wasn’t on Friday afternoon, but it should be very influential if it does compensate for the delay. Meanwhile, while the open’s gap disqualifies a Globex-flip setup, probing Friday’s lows overnight does create potential for an Isolation setup. All of which is probably premised on China tariffs being discounted. Speaking of whom, we haven’t heard from China, and retaliatory tariffs would deserve at least another knee-jerk reaction down to 2919.25 before suggesting anything more substantial.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2936.00 would be unlikely to trigger the 2932.00 bias-down signal at 10:15. Exiting the open under 2927.00 would be likely 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…
Wednesday’s thinly-traded narrow range resolved just hours before Thursday’s open. Gapping up 12-13 points to 2928.00 then trended higher relentlessly into the afternoon to attack 2941.00. Its proxy served to trigger an actively bullish WedEX. Thursday afternoon’s final hour entry and proxy window gained traction, which the position-squaring window neither exploited nor rejected.

Overnight action’s new info…
Globex initially consolidated Thursday’s gains while ranging flat-to-higher up to 2942.50. That became slightly more pronounced into and out of Europe’s opens, extending briefly to 2945.50. Its complexity creates a “new Globex trend extreme”. The reaction has now retraced back into yesterday’s range to test the 2938.00 earlier Globex low.

If, then… (notes to accompany the Tour recording)
This dip back into yesterday’s range is testing the earlier Globex low, and breaking it through the open would reverse the trend down for at least the morning. There is meanwhile now another upside attraction or influence in addition to this afternoon’s bullish WedEX. It’s the overnight probe of fresh highs that formed a “new Globex trend extreme,” which requires intraday retest. Thursday afternoon’s traction doesn’t immunize Friday morning from a pullback. And a morning pullback wouldn’t necessarily interfere with the afternoon’s plans. Regardless, keep in mind that expiration — Quad Witch, no less — can accentuate, accelerate, or prematurely abandon otherwise reliable signals. This being a Friday, the morning’s bias tends to persist through the noon hour.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2937.50 would be unlikely to trigger the 2940.50 bias-up signal at 10:15. Exiting the open above 2943.25 would be likely 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…
Wednesday’s pre-open to post-open surge was very deceptive to those that didn’t know better. Surging from a fresh overnight low at 2906.00 to attack Tuesday’s 2917.75 high might have suggested an opportunistic session ahead. But not with the day’s volume likely to be thin. Choppiness persisted during the morning, with a dip back down to 2910.00 recovering to momentarily pierce a new high at 2918.75. Still, no trending, as the entire afternoon ranged narrowly between 2912.50-2915.50. The dead afternoon undermines the reliability of a passively bearish WedEX that triggered on the day.  “Unfinished business” was left outstanding at 2908.00.

Overnight action’s new info…
Price has improved, but nothing’s yet obviously predictive. Yesterday afternoon’s narrow range had ended on an upswing to its 2915.50 upper-end, which initially firmed further through the Globex open up to 2918.00. Its reversal back down into the range was recovered to touch yesterday’s 2918.75 high. Its reaction down barely attacked yesterday afternoon’s high as support.

If, then… (notes to accompany the Tour recording)
If overnight price improvement is going to be predictive, then it’s time to start being obvious about it. And this pattern only offers a chance for being bullishly predictive, not bearishly. The first step would be to indicate a gap up. Not only because no traction was gained yesterday, but also to convert the passively bearish WedEX into actively bullish. That can be done by proxy of gapping up or immediately extending to fresh highs. So, whether at Thursday’s open, or later intraday, the rally is free to resume at any time. All of which would require ignoring the 2908.00 attraction below. And a pullback has room deeper down to 2903.00 just as noise — momentum doesn’t even threaten to reverse down from above 2900.00. .

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2920.25 would be likely to trigger the 2918.25 bias-up signal at 10:15. Exiting the open under 2915.50 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…
Probing well under Monday’s 2892.25 low down to 2883.50 was recovered to greet Tuesday’s open at or above 2897.00. Probing lower only overnight formed the basis for an Isolation setup, to be rewarded by recovering Friday’s 2917.25 overnight high. Quickly extending the open up through Monday afternoon’s last relative high at 2903.00 served by proxy to signal the two-day pullback had ended, also implying a recovery of prior highs. Both were fulfilled Tuesday afternoon. Their tests up to 2917.75 held, as the close reacted down to attack 2910.00.

Overnight action’s new info…
Bouncing up to 2915.25, which is this morning’s bias-up signal, reacted down to 2909.00. Another bounce was shallower, bouncing only to 2913.25, which has defined price action ever since. And currently, the range’s lower-end at 2909.00 is being attacked.

If, then… (notes to accompany the Tour recording)
Retesting Friday’s highs shouldn’t be the recovery’s ultimate objective, but incidental to the uplegs now underway. A top should not be forming, although Wednesday might appear that way. The Yom Kippur holiday’s thinner volume will inhibit probing a prior extreme, which enables retracing recently covered ground. A pullback could easily dip to 2903.00 alone as noise. That said, thinning volume can make it difficult to stop price that extends higher anyway, which an appropriate catalyst could trigger.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45  above 2909.00 would be unlikely to trigger the 2908.00 bias-down signal at 10:15. Exiting the open under 2912.25 would be unlikely to trigger the 2915.25 bias-up signal at 10:15.

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 was book-ended by trade war news. Sunday afternoon headlines triggered a gap down that hovered 2904.00 overnight. Testing and attacking Friday’s 2911.25 fresh high close before and after Monday’s open found plenty of sellers post-open. The morning bias-down signaled and its target was met, as were the afternoon bias parameters when more headlines announced that tariffs would be announced post-close. The optimal 2897.00 pullback limit was probed by 4-5 points, and then recovered 1 minute after the close, too late to be bullish.

Overnight action’s new info…
Another trade war headline onslaught, and another brief effect. The forewarned tariff headlines were greeted at 2893.50, which is Tuesday morning’s bias-down signal. The first reaction collapsed down to 2887.50, which is Tuesday morning’s bias-down target. Another dip extended down to 2883.50, where a rally began, recovering to 2893.50 by midnight. The rally resumed and recovered to greet Europe’s opens in positive territory, absorbing a brief dip before extending higher to touch 2903.00.

If, then… (notes to accompany the Tour recording)
Before yesterday’s close, Monday’s pullback would have ended as a very natural pullback by holding the test of 2897.00‘s “lower prior highs.” After yesterday’s close failed that, reinstating upside momentum could be done by proxy at the following open. But being one timing window later would require opening above the next prior high, which is 2903.00. That’s where the open is currently indicated. More so, another potentially bullish setup has developed after probing under Monday’s low, which is to isolate its probe to the overnight by opening back up within Monday’s range — and not probing back under it intraday. Avoiding either setup to instead open under yesterday’s low could still complete the pullback by holding a test of 2887.00-2888.00. But any deeper of a pullback would be bearish, while fully forming at least one setup without also triggering it would be as bearish as it would have been bullish.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2903.50 would be likely to trigger the 2901.50 bias-up signal at 10:15. Exiting the open under 2897.00 would be unlikely to trigger bias-up.