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…
Since sellers weren’t retaking control at Thursday’s open, the first hour surged by default. The 11-point move covered a pre-open test of the 2858.50 bias-down signal and a test of the 2868.50 bias-up signal to its 2869.50 room for noise. But its excessive optimism couldn’t defend against a collapse back down to fresh lows testing 2855.00 by noon. The balance of the session ranged choppily back up to 2862.00. No unfinished business above was left outstanding.

Overnight action’s new info…
The afternoon’s 2862.00 upper-end was probed slightly by midnight. Fluctuating narrowly around it into and out of Europe’s opens has resolved up. Now fresh overnight highs are testing 2865.50, a 61.8% extension from Thursday afternoon’s range, and at least a 61.8% retracement back to yesterday’s high.

If, then… (notes to accompany the Tour recording)
Neither buyers nor sellers gained traction for their efforts yesterday, so trending beyond yesterday’s range this morning requires gapping. That’s was a much longer way for buyers as of the close, but now they’ve essentially recovered relevant levels around 2866.00. Meanwhile, that’s also resistance. Recovering it through the open would at least help to trigger bias-up and then to test yesterday’s highs. The knee-jerk reaction to Fed Chair Powell’s 10:00 remarks may inhibit opening action. This being a Friday, the morning’s bias signal is likelier to persist through the noon hour, which could leverage a morning bounce into a strong afternoon rally. All based on recovering relevant levels around 2866.00 through the open. Holding its test, or already dipping into the open would be vulnerable to the exact opposite, trending down into the weekend.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2866.50 would be likely to trigger the 2863.00 bias-up signal at 10:15. Exiting the open under 2859.25 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…
Closing flat with its 2863.50 open Tuesday had reflected indecision and distribution, enabling the afternoon’s decline to extend down sharply overnight to attack 2846.00. Recovering to greet Wednesday’s open at 2859.50 and extend through the morning to 2868.00 fulfilled the expected corrective bounce of the drop from Tuesday’s high. Dipping to 2860.50 through the 2:30 bias window exit produced a shallower bounce, which was retraced entirely into the close. The cash session close was within 3 ticks of 2863.50, still reflecting distribution.

Overnight action’s new info…
Flat-to-lower-to flat. The Globex open quickly firmed to probe 3 ticks above Tuesday’s 2863.50 cash session close. A reaction to China’s overnight intervention triggered a dip to 2857.50 by midnight. All of which has been retraced to retest Tuesday’s 2863.50 cash session close.

If, then… (notes to accompany the Tour recording)
Leaving no “unfinished business” above Tuesday had also enabled the steeper, deeper overnight dip. Wednesday also leaves no unfinished business. But Tuesday’s drop was already underway organically, before that sponsorship was crowded out by the weak-handed knee-jerk reaction to a synthetic catalyst. That leg didn’t require a complete retracement to the headline’s origin, but it’s been done anyway. Can another downleg be credible before more fully rewarding Tuesday night’s buyers with fresh highs above 2874.00? Probably not if Thursday’s open doesn’t quickly start producing that downleg (I describe three setups in the Market Tour). But not gapping up to and/or through Wednesday’s 2868.25 high would not require a rally to target any particular higher objective.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2867.25 would be unlikely to trigger the 2869.50 bias-up signal at 10:15. Exiting the open above 2863.50 would be unlikely to trigger the 2860.25 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…
Tuesday’s gap up to 2863.50, which was the two-week old prior high. Probing higher through the noon hour neutralized unfinished business at 2866.25 and 2873.00. No-bias triggered as price drifted lower through the afternoon bias environment. The session’s close was back at 2863.50, representing indecision, and also touching the two-week old prior high.

Overnight action’s new info…
Yesterday’s late news has had a big effect. Price had already turned down organically Tuesday afternoon, and headlines steepened the dive through the 2861.00 futures close. Plunging to 2852.00 and extending to 2847.00 into and out of the Globex open was retraced to 2857.50 by midnight. A 6-point reaction down was recovered into and out of Europe’s opens, but only started breaking higher 90 minutes ago and is now filling the gap back to yesterday’s 2861.50 futures close — 15 points off the low.

If, then… (notes to accompany the Tour recording)
A lot of ground was covered by yesterday afternoon’s decline, and another 161.8% into early evening. So, its 61.8% retracement would also fill the gap back to yesterday’s 2863.50 cash session close. That’s also yesterday’s open. All being resistance, which evokes an important question: As late as yesterday’s news was, and as slowly as the market appreciated it before the close, has the intraday crowd yet fully reacted to it? To the degree it hasn’t, opening back in negative territory would be that much more inviting to post-open selling, and that much more difficult to recover. Probing into positive territory would still have a lot of resistance above to prevent fully retracing yesterday’s highs.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2855.50 would be likely to trigger the 2857.75 bias-down signal at 10:15. Exiting the open above 2859.00 would less likely to trigger bias-down, and above 2865.00 at 10:15 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…
Monday’s gap up to 2857.00 was overlapping Friday’s high, and it was under the 2860.00 overnight high. Restrained optimism was potentially bullish from a contrarian perspective, but didn’t prevent a dip that filled the gap back to Friday’s 2851.75 close. Price never turned negative, and rallying into the noon hour’s entry attacked the open’s 2858.50 high. Ranging flat-to-higher finally probed the overnight high to attack 2861.00 before a Trump headline triggered a dip back to 2857.00. Hold-long was disqualified because the potential reward for gapping up to-and-through 2863.50 to 2866.25 was just 3-6 points, compared to potential for dipping 6-7 points to 2854.00 first.

Overnight action’s new info…
Monday’s late reaction down extended through the Globex open, ultimately touching 2854.00 at its low. Monday’s 2858.25 close was recovered by midnight. Europe’s opens not falling apart encouraged firming just a little to 2860.00, and not falling apart from there resolved up to attack 2865.00. Complexity has developed above yesterday’s highs, creating a “new Globex trend extreme” that requires an eventual intraday retest.

If, then… (notes to accompany the Tour recording)
This morning’s open is indicated to be the open that yesterday could have been. Friday’s rally had peaked upon testing the prior week’s “higher prior lows” at 2854.00-2855.00. Extending higher without delay probably would have gapped up above that structure’s 2863.00 upper-end. It wasn’t the only path higher, but none of the others were taken yesterday, either — instead, the overnight and intraday highs held the structure’s 61.8% internal retracement. But now this morning’s open is currently probing 2863.00, with the added assistance of having fulfilled its overnight pullback limit at 2854.00. Meanwhile, “unfinished business” left outstanding at 2866.25 during that structure’s forming had assured us last week’s interim dip to 2803.00 was only temporary. Its test is likely today, with the next higher objectives being 2873.00 and potentially 2883.00.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2863.00 would be likely to trigger this morning’s 2861.50 bias-up signal at 10:15. Exiting the open under 2859.00 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…
Overnight ranging up to 2849.00 and down to 2835.00 greeted Friday’s open toward the range’s lower-end. The open’s range was much narrower than overnight, but also noncommittal in either direction. But touching 2835.00 again finally started a rally that would extend into noon up to 2848.00. Reacting down 7 points to 2841.00 through the noon hour was reversed up by the bullish WedEX influence up to 2857.00. The prior week’s “higher prior lows” at 2854.00-2855.00 held as resistance through the close. But the rally still gained traction for its efforts by the bias environment exit and final hour’s entry both exceeding their prior timing window highs.

Overnight action’s new info…
Friday’s support has persisted overnight. Its last reaction down had tested 2850.50, and firming from there extended at Sunday night’s open to 2855.00. Its reaction down tested 2850.50 before midnight, as did another, shallower bounce’s reaction down after midnight. A break lower seemed imminent, but it was circumvented by Chinese government intervention. Surging into and out of Europe’s opens probed Friday’s high by 3 points up to 2860.00. Now its reaction down is testing Friday’s high as support down to 2856.00.

If, then…
Trend extremes aren’t associated with expirations. So, an unlikely collapse today would likely be brief and recover entirely. Anyway, the first likelihood is to probe higher highs this morning since Friday’s rally gained traction. Even despite NDX underperforming S&Ps, and more so the Dow for a second consecutive session Friday, the market certainly seems like it wants to trend higher, at least in the near-term. There’s also follow-through from the bullish WedEX. And having peaked Friday upon testing “higher prior lows” from the prior week’s 2854.00-2863.00 consolidation, extending higher out of the weekend is likely to gap up to and/or trend through its upper-end. The overnight high has retraced that range already to 61.8%, so any higher would all but confirm the 2854.00-2863.00 consolidation’s complete recovery underway.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2852.00 would be unlikely to trigger the 2854.50 bias-up signal at 10:15. Exiting the open above 2857.00 would be likely to trigger bias-up.