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…
Trending up throughout Wednesday night probed above Wednesday’s intraday high at Thursday’s open up to 2791.00. It quickly reacted down to 2782.75 throughout the entire opening 15 minutes of volatility. The balance of the session wouldn’t seem so, but that opening drop created a position of weakness. Any rally it produces should be doomed to failure, which has yet to be evident as of Thursday’s close. Instead, the overnight rally resumed and extended up to 2800.50 through the noon hour’s exit. The balance of the afternoon ranged sideways down to 2795.00, or several ticks lower. The afternoon’s bias-up signal had triggered, leaving outstanding its 2804.00 bias-up target.

Overnight action’s new info…
Thursday afternoon’s pause soon ended after the Globex open, trending up to fulfill the intraday unfinished business at 2804.00. Consolidating there eventually resolved up to 2807.25, but only briefly. The extension above 2804.00 was retraced into Europe’s opens, then the extension above yesterday’s ~2800.00 highs was retraced after Europe’s opens. More so, the earlier overnight low was probed down to 2795.50. Its reaction attacked 2801.00.

If, then…
Despite a very last-minute surge that touched 2801.00, Thursday’s closing action was still overlapping Tuesday’s 2797.75 highs. Settling above it was too late to trigger a higher objective. Like Thursday’s opening “position of weakness,” that doesn’t prevent first probing higher, first. And it hasn’t. Separately, another setup has touched February’s 2800.75 “Pivotal” high, which puts into play a test of the 2809.00 and 2813.00 actual highs. Last night’s rally up to 2807.25 does not fulfill either of those targets. But neutralizing yesterday’s 2804.00 “unfinished business” and the near-term buying pressure that had created it. The door remains open to a downdraft before fulfilling the upside objectives, and having returned to the earlier overnight low, that downdraft would be more credible immediately than delayed.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2797.00 would be unlikely to trigger the 2804.00 bias-up signal at 10:15. Exiting the open above 2806.25 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…
Tuesday’s satisfied buying pressure and subsequent inertia had made a pullback likely. It also made the market vulnerable to overreacting to news. And news came after the close to trigger a 30-point plunge overnight to test 2766.00. Greeting Wednesday’s open 12 points higher eventually extended to attack 2788.00. But the balance of the morning retraced back down to the open, and the balance of the session ranged choppily sideways. That included breaking lower during the very latest stage of the afternoon’s no-bias environment, which was almost too late to be considered no-bias trending. Its recovery cleared the way for resuming the decline, or else extending the recovery. Perhaps it was the CME’s outage that prevented both.

Overnight action’s new info…
The CME outage was resolved before the close, but the range persisted well into Globex. Surging before midnight up to 2784.50 ranged sideways even longer, into and out of Europe’s opens. A blip-down to 2778.50 snapped back up to touch yesterday’s 2787.75 high. And now it’s being probed up to 2791.00.

If, then…
The overnight resolution was likely to reveal the market’s intent, either gapping up above Wednesday afternoon’s 2782.50 high, or else breaking under the afternoon’s 2772.00 low. Gapping up is now indicated, and the scheduled pre-open reports probably don’t have the influence to change that trajectory. The risk of probing yesterday’s high post-open requires that it be maintained through the opening 15 minutes of volatility. Otherwise, rather than recovering yesterday’s high, failing to hold its post-open test could repeat yesterday’s reaction down — whether as a temporary dip into yesterday afternoon’s range, or to resume the decline. Having trended higher relentlessly overnight, attracting reinforcements through the open can extend the overnight trend, and not attracting reinforcements can kill it.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2792.50 would be likely also to exceed the 2788.00 bias-up target through 10:15 to renew the bias-up signal. Exiting the open above 2785.00 would be likely at least to trigger the 2780.50 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…
Tuesday’s open held tests of its 2789.75 bias-up signal as support, and soon extended higher until testing the morning’s 2797.50 bias-up target. Reacting down through the noon hour retested the morning’s low, and reversing up into the close retested the morning’s high. The final hour was entered too low to gain traction for the afternoon recovery. So, trending up further would be unlikely, and trending up anyway would be likely to fail. The close trended up anyway. The identical open and close — not in price, but by their legs covering the same ground — is inertia. And inertia at the new extreme of a multi-session trend suggests that sponsorship needs a pullback.

Overnight action’s new info…
Did I say pullback? I meant plunge, of course. New tariffs on China released soon after the Globex open triggered a 17-point plunge  to 2780.50. Drifting down to 2773.00 formed a Descending Triangle that resolved down to 2765.75. That was Friday afternoon’s high, and its touch produced a bounce back up to 2781.00. A big bounce, which produced a big reaction down to 2769.50. Now a bounce is attacking 2779.00.

If, then…
Was last night’s tariff reaction an overreaction? Buying pressure was freshly satisfied at Tuesday morning’s bias-up target, and no higher target was since triggered. More so, price action since fulfilling yesterday morning’s target only ranged sideways — and even tried to rally when it would not gain traction for the effort. Just revisiting 2788.00 was already likely to trigger substantial follow-through, which there has been. There’s certainly potential for even more substantial follow-through, like to 2761.00-2762.00, and bouncing first to 2784.00-2785.00 would likely be only a correction. But the degree of follow-through already done does introduce vulnerability to that corrective bounce, first. Holding the corrective bounce’s recovery through a relevant window would start to suggest the reaction down was done.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2780.25 would be likely also not to recover the 2782.00 bias-down target at 10:15, renewing the bias-down signal. Exiting the open above 2784.00 would be likely at least to trigger the 2789.75 bias-down 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…
Gapping up 10 points Monday to 2773.50 surged to 2779.00 and back down again. But not so far as to reverse momentum back down, all but putting into play 2788.00. The open held its test as support to resume rallying into the noon hour up to 2785.50. Its correction held the morning’s 2779.00 high and resumed rallying again — into a last-minute surge that came within 3 ticks of 2788.00. Post-close action immediately fulfilled it, neither extending above it nor reacting down from it.

Overnight action’s new info…
The post-close extension quickly formed a Close-quarters Double Top. But for absorbing it, Monday’s rally resumed immediately, and steeply, testing 2796.00. (There’s what appears to be a bad print or very errant ticks up to 2797.75.) Pulling back into and out of Europe’s opens tested and retested 2788.00. Its support has pushed price back up to 2794.50, where the difference will be made between extending or dipping again to 2788.00.

If, then…
The 2788.00 target was essentially met Monday, but wasn’t rejected before the close, so gapping up Tuesday wasn’t going to be surprising. Already extending 8-10 points higher overnight created that much room to absorb the subsequent selling pressure before it could damage the chart, helping yesterday’s late high hold its test as support. And having done so, there’s no bullish reason to retest 2788.00 except for a post-open dip to quickly reverse up. Exiting the open in negative territory would more likely trend down through the morning.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2790.75 would be likely to trigger the 2789.75 bias-up signal at 10:15. Exiting the open under 2785.00 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…
Thursday night’s choppiness had fluctuated between probing the 2739.75 intraday high up to 2747.25 to retracing it down to 2731.25. The setup can be as bullish as it would have been bearish, when fully formed but not triggered. Friday’s Employment Situation report triggered a surge to 2744.50, that still needed another dip before the open could rally to fresh highs. The pre-open restraint paid off by letting post-open buying pressure run up to 2764.25 into the noon hour. Potential to the low 2760‘s was fulfilled, and the balance of the session fluctuated around 2760.00-2761.00. A late dip down to 2757.00 began too late to be strong-handed, and snapped back up to attack 2764.00 into the close. Two-week old gaps and higher prior lows were tested from below, and held through the close to prevent putting any higher targets into play.

Overnight action’s new info…
Sunday night’s open was uneventful, no gapping involved. But price immediately began firming back up to and through Friday afternoon’s highs. Extending to 2774.50 by midnight has since ranged sideways between 2770.00-2775.00. The upper-end is being pierced now.

If, then…
Despite not retracing the initial upleg, the overnight plateau disqualifies overnight action from being relentless trending. Nevertheless, the burden of proof is on buyers to maintain a gap coming out of the weekend. Already probing above this morning’s bias-up 2772.50 target, the next higher resistance is likely to be tested at 2777.25. Testing 2780.00, too, during a relevant window would make its recovery — or rejection — predictive. In other words, testing 2777.25 and/or 2780.00 must be maintained to avoid reversing down sharply through the morning.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2764.25 would be unlikely to trigger the 2766.00 bias-up signal at 10:15. Exiting the open above 2768.25 would be likely to trigger bias-up. Exiting the open under 2772.00 after testing 2777.25 could reverse momentum down.