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…
Thursday morning’s low was 19 points under the 2735.75 overnight high, and still held positive territory. The drop was recovered entirely before leaving the noon hour. It was also still an inside day, contained within Tuesday’s range, until a later probe higher to 2739.50. That included another drop which was also fully recovered, reacting down to the FOMC Minutes. It created the afternoon’s 2725.00 low. Regardless of the late surge, Tuesday’s downside momentum has yet to be reversed.

Overnight action’s new info…
Globex gapped down under Thursday afternoon’s 2737.50 high to immediately reject the late surge. Immediately extending lower to test 2733.00 didn’t prevent recovering to retest the late surge up to 2740.00. And it didn’t prevent a spike up after midnight to 2745.00 that extended up to 2747.50 before Europe’s opens. More like until Europe’s opens. Collapsing back down to 2735.00 was retraced 6 points, but only temporarily. Now 2733.00 is being retested.

If, then…
Regardless of current indications, the soon-to-be released Employment Situation report makes today’s actual opening print wild card. But we do know there are two bearish setups forming, waiting to be triggered. First, having trended up into Thursday’s close, gapping down Friday under Thursday afternoon’s 2725.00 low would form a “session-long decline.” That much we knew at yesterday’s close, but now a second setup may be forming since first dipping at last night’s Globex open (see image). Having probed above Thursday’s intraday high, exiting Friday’s open under the earlier 2732.75 overnight low would reverse momentum down through the morning. Otherwise, not exploiting the reversal potential would be likely at least to test the overnight high. And this being a Friday, when the morning’s bias signal tends to persist through the noon hour, extending higher could reach the mid-2750s and maybe low 2760s.

First Trade…
[Click here to view the Bias parameters] No preliminary levels are considered ahead of Employment Situation reports.

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 2736.50 open was backing-off of the 2741.50 overnight high, but still gapped up 9 points from Monday’s close. It was still much more a test of the recent range’s upper-end, opposite of Monday’s open gapping down to the same range’s lower-end. And it was no more likely to extend beyond the range without extending immediately. Which, like Monday, it did not. Just drifting back down through the morning to attack Monday’s 2727.25 close could have sufficed for the early close session, but US-China trade war headlines triggered a slide to 2712.00 by the close. Ending back under 2718.00 helped to maintain the decline’s traction, which still needs confirmation by extending down Thursday without delay, regardless of a possible bounce during the Globex holiday trading.

Overnight action’s new info…
Tuesday night’s Globex open blipped-down to 2711.00 and then proceeded to bounce, to within 2 ticks of Thursday morning’s 2724.50 bias-up target. Last night’s session initially dipped to retrace almost all of the bounce down to 2712.50. But no deeper. And rallying through Europe’s opens has extended to 2733.00, which is probing slightly above where Tuesday’s US-China trade war headlines triggered its slide.

If, then…
Immediately extending Tuesday’s slide is not a likely scenario after having bounced so much overnight. But another confirmation setup remains valid since overnight action didn’t get the opportunity to reject a probe lower, and that is to immediately trend down through the open and eventually end under Tuesday’s close. Just closing back under 2718.00 would at least keep alive downside momentum into the weekend. None of that is currently indicated, and trending up through an open that is back at or above the last downleg’s origin would be likely to extend higher through the morning. The trick to that isn’t extending higher, but not to reject the origin’s recovery, which is as much resistance as the recent range’s upper-end.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2726.50 would be likely to exceed the 2724.50 bias-up target at 10:15 to renew the bias-up signal. Exiting the open above 2721.25 would be likely at least to trigger the 2718.00 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…
Sunday night’s steady decline from 2728.00 to 2698.50 was retraced 38.2% before the open — not a healthier 68.2%. That much pessimism wasn’t going to trend down intraday unless maintained through the open. A quick probe under the overnight low could have formed a bottom, but an attack on it down to 2700.50 sufficed. The morning snapped back up to attack 2719.00, but from a position of weakness that was likely to retrace 2704.00. Which it did. Its retracement was likely to extend down. Which it didn’t. The balance of the session rallied back into positive territory up to 2728.50.

Overnight action’s new info…
Somewhat similar to Sunday, last night also essentially began with a blip-up that was reversed down. Last night’s blip-up was a little further in, initially surging 8 points to attack 2733.00, then snapping back down more than 11 points to attack 2721.00. Last night’s blip-up was also recovered, retraced into Europe’s opens, and extended to attack 2740.00 as Chinese banks actively supported the Yuan.

If, then…
Was anticipation that China would be forced to step in sooner rather than later responsible for Monday afternoon’s rescue? Or, the mid-week holiday’s volume constraints? Maybe a little of both, but more the latter than the former. In other words, China’s near-term effects on Global markets tend to be retraced. Meanwhile, trending beyond the existing range is difficult around holidays, while trending back to the range’s opposite end is easier. And now, markets are at the recent range’s upper-end, freshly retraced from its lower-end. Trending up today, and not down, probably requires trending up early. Today’s early close only makes breaking beyond the range more difficult. Extending Monday afternoon’s rally intraday was always least likely, and no more likely just for having extended it overnight… Closing Friday under 2718.00 kept alive selling pressure through the weekend. Closing above it Monday would usually require rejecting it Tuesday, but normal requirements are less influential on a shortened session — let alone ahead of a holiday. Nevertheless, trending back down to 2704.00 is still the likeliest objective for any reversal. REMINDER: Today’s early close is at 1:15 PM ET early close. Market Wrap will be held early.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2735.50 would be likely to exceed the 2735.50 bias-up target at 10:15 to renew the bias-up signal, next targeting 2740.75 and 2745.00. Exiting the open above 2733.00 would be likely to trigger the 2730.50 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…
Friday morning’s rally rewarded Thursday’s buyers for having gained traction. Gapping up to 2730.00 extended higher through the bias environment to 2745.50. Thursday’s close back under 2718.00 created a position of weakness for launching Friday morning’s rally. So the rest of Friday gradually retraced the post-open gains. And then quickly retraced much of the pre-open gains down to 2720.75. Collapsing under the opening gap signaled its rejection. Ending back under Thursday’s highs increased the vulnerability to gapping down Monday.

Overnight action’s new info…
Sunday night’s open blipped-up to 2725.25 then spiked down to 2712.50. The spike down was triggered by news of a not-new story (WTO exit), and recovered to test this morning’s 2727.25 bias-up signal. But it was straight down from there — relentlessly, more than aggressively — to greet Europe’s opens at 2702.00, soon extending to 2698.50. Price action since then has consolidated back up to 2710.00.

If, then…
There’s nothing bullish about probing under 2704.00 again, as did three of last week’s sessions. Support there has been thoroughly chipped away, including 10 points lower where Thursday morning found its low. Post-open action may not dip back down to 2704.00 or it may isolate its test to the open. Not already recovering 10 points higher through the open would remain vulnerable to another downleg.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2709.75 would be unlikely to recover the 2711.00 bias-down target at 10:15, renewing the bias-down signal. Exiting the open under 2715.00 would be likely at least to trigger the 2718.00 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…
What began as a probe of fresh lows Thursday ended as a reversal through almost every intraday timing window. A pre-open collapse to 2693.25 rewarded Wednesday’s sellers for having gained traction. But it had originated too late to avoid being retraced back up to 2707.00. Its post-open repeat got no further before bouncing off of the bias-down target and back up through the bias-down signal to rob sellers of their traction. Extending the recovery through the morning endured a noon hour pullback to extend the recovery through the afternoon. The 2726.25 peak was a 61.8% retracement back to Wednesday morning’s high, and it gained traction with the same timing as Wednesday’s sellers. Reacting down closed back under 2718.00 to avoid signaling the trend starting to reverse up.

Overnight action’s new info…
Thursday’s late pullback was maintained well into Globex, supported by 2718.00. Surging to fresh highs above 2730.00 eventually extended through Europe’s opens up to test 2737.00. It looked good, for awhile. But that extension was retraced back under 2730.00, and then to 2723.00 as yesterday’s 2726.25 high now fights to hold as support.

If, then…
Closing under 2718.00 didn’t reverse the trend down, but formed a position of weakness that dooms to failure an early attempt to extend higher Friday. The attempt part of the equation has developed overnight, so its failure can become obvious without any delay. We have two consecutive sessions of reversing early trending attempts — regardless of their being in opposite directions — so, be prepared for this to be a new behavioral pattern. Having said that, this being a Friday, renewing the bias-up or not rejecting it altogether would be vulnerable to extending higher into the afternoon.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2730.75 would be likely to trigger the 2727.00 bias-up signal at 10:15. Exiting the open above 2735.50 would be likely to exceed the 2733.00 bias-up target at 10:15 to renew the bias-up signal. Exiting the open under 2722.50 would be unlikely to trigger bias-up.