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…
Volatility made its most obvious display on Wednesday, even before the open. An overnight drop had probed probe under Tuesday’s 2717.50 low to 2705.50, and was recovered to greet Wednesday’s open just short of Tuesday’s 2735.25 highs. That recovery was extended to the morning’s 2748.00 high before reversing back down through the overnight low to 2701.00. The intraday downleg had retraced 61.8% of the recovery and still exhibited optimism in the form of a Running Correction / Falling Wedge. “Ineffectual optimism,” because the pattern resolved down. No “unfinished business” was left outstanding as the session ended at 2702.00/2705.00.

Overnight action’s new info…
Trending up gradually to 2714.00 was retraced down to 2706.00 into Europe’s opens. The reaction to Wednesday’s intraday decline was muted, enabling a quick recovery up to 2717.00.The defensive posturing had paid off, initially, but only temporarily as the recovery was reversed entirely back down to 2704.50. Another recovery, even steeper than coming after Europe, tested 2716.00, and is now reacting back down again to 2707.00… all in positive territory.

If, then…
Wednesday’s session suggests that Tuesday night’s decline has resumed, which was already an effort to resume Monday morning’s decline. Not extending down already overnight isn’t bullish, — only hovering in positive territory is potentially just another instance of “ineffectual optimism.” Yesterday afternoon’s instance resolved down, and hasn’t been recovered. Notwithstanding support along the way, the next lower objective is to retest the 4-week old 2679.00 low, and that should offer only obligatory support. Meanwhile, since yesterday’s sellers gained traction for their efforts, gapping up above 2722.50 would be credible for reversing the trend back up.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2709.75 would be unlikely to trigger the 2711.00 bias-up signal at 10:15. Exiting the open above 2713.00 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 2725.75 open only overlapped Monday afternoon’s 2725.00 high. Gapping up higher or extending could have invalidated the traction not gained by Monday afternoon’s buyers. So, Tuesday morning ranged very choppily between 2718.00-2728.00, holding the morning’s 2728.25 bias-up target. Extending the rally through the noon hour came within 1 tick of its 2735.50 bias-up target. It also held, like the morning’s target. The balance of the session drifted back down to 2723.25, absorbing a 5-1/2 point headline bounce. And the session went out overlapping its prior high from Monday afternoon, again gaining no traction for its efforts, and leaving no unfinished business outstanding.

Overnight action’s new info…
Globex initially bounced up to 2732.50, 3 points short of Tuesday afternoon’s high. Consolidating back down to 2724.50 got in a 5-point bounce to test this morning’s 2729.00 bias-up signal before sliding into and out of Europe’s opens. A lot. Ultimately reaching 2705.50, a 16-point bounce has has retraced 61.8% of the overnight drop from testing 2729.00. That is probing slightly back above yesterday morning’s lows and almost attacking this morning’s 2722.50 bias-down signal as resistance.

If, then…
The overnight low attacks Monday’s lows. The overnight dip avoided touching Monday morning’s 2703.75 pivotal low, which avoids requiring a retest of Monday afternoon’s 2700.50 actual low. I would expect a second bite at that apple to succeed at creating the new attraction below. Otherwise, isolating the probe under yesterday’s lows to the overnight — i.e. not only triggering no-bias above 2722.50, but avoiding 2717.50 post-open — would target a retest of yesterday’s high. Triggering bias-down would resume Monday’s break and the attraction to 4-week old lows, where the trend reverses down.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2725.00 would be unlikely to trigger the 2722.50 bias-down signal at 10:15. Exiting the open under 2718.25 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…
Monday’s bigger and bigger legs confirm that volatility remains very much alive. The overnight drop from Friday’s 2759.00 close had extended to 20 points attacking 2739.00. The morning’s 2746.25 bias-down target provided one last bit of post-open resistance to launch a 26-point plunge attacking 2720.00. Another bounce resolved down sharply, too, falling 27 points to test 2704.00 into the noon hour. One more 21-point drop during the afternoon bias environment retested the morning’s low down to 2700.50. Its reaction was the most productive, bouncing through the final hour back up to 2725.00 which overlapped the afternoon bias environment’s 2721.75 interim high.

Overnight action’s new info…
Monday’s intraday volatility continued overnight, albeit not at first glance. Ranging round Monday afternoon’s 2721.75 bias environment high persisted through Europe’s opens. No longer trending might seem non-volatile, but each interim swing has reached a higher high or higher low than its last. More so, Europe’s opens were greeted with a fresh overnight high at this morning’s 2728.25 bias-up target, and its reaction just touched a fresh overnight low at 2714.75.

If, then…
Yesterday’s final hour bounce had probed the afternoon’s prior high, and not just briefly. Closing above it was entirely possible, if the bounce’s buyers had been bullish. Apparently, the deep drop still wasn’t considered to be enough of a bargain. Since buyers didn’t gain traction, extending the late bounce without delay this morning would require gapping up. The decline is otherwise likelier to persist, which would also be much more credible this morning if begun without delay or by gapping down. Also considering the overnight volatility, early trending would be credible for extending.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2715.00 would be unlikely to trigger the 2713.00 bias-down signal at 10:15. Exiting the open under 2720.75 would be unlikely to trigger the 2722.50 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…
Thursday night’s relentless trending into Friday’s gap up to 2767.00 was the basis for a session-long rally setup that only needed to be maintained, if not also extended. It was barely maintained, and was not extended. Reacting down to 2757.00 was fully recovered to 2767.00, where Friday Factors inhibited volatility through the balance of the session. At least, until I left the screen early. My final comments warned of greater risk down to 2758.00-2759.00 than up to a fresh high, but also the difficulty to producing either before the close. That didn’t prevent a late drop to attack 2755.00. Its break was too late to form a hold-short, but its reaction entered the weekend at 2759.00 — that was the potential drop’s target, and not recovering it opened the door to extending down. Ultimately holding 2756.00, but not recovering 2767.00, changed nothing about buyers still not regaining control. However, it did require sellers to prove without much delay that they’re still in control.

Overnight action’s new info…
Friday’s late drop probed lower immediately Sunday night. Probing under 2755.00 soon collapsed to test 2743.00, Consolidating back to 2749.00 gradually started breaking lower to eventually attack 2739.00. Its reaction has bounced up to 2746.00.

If, then…
Tuesday night’s action had warned volatility would be expanding sharply. Which it did, all the way through Thursday’s close. Last night’s relentless trending and productivity of that trending suggests the volatility has resumed. Separately, Thursday’s close had warned that lower lows were underway. Friday’s gap up had all but rejected that, but didn’t exploit it. Not, yet. Meanwhile, last night has trended relentlessly. Thursday night’s relentless rally didn’t extend Friday, but last night’s relentless trending has the benefit of greeting maximum liquidity instead of minimum. That said, not trending down through the open could undermine the pattern.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2747.75 would be unlikely to exceed the 2746.25 bias-down target at 10:15 to renew the bias-down signal. Exiting the open under 2750.50 would be likely to trigger the 2753.00 bias-down signal at 10:15. Exiting the open above 2756.00 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…
Yhursday’s 2769.50 open was only slightly negative, but it was well under Wednesday night’s 2785.75 high. That triggered the Globex reversal setup to produce a bearish Thursday morning that almost touched 2750.00. A corrective bounce up to 2763.50 was eventually reversed to fresh session lows at 2747.00. Sellers gained traction for their efforts, but the late drop still stopped optimistically short of Tuesday’s 2746.00 post-open low. A bounce closed back above the morning’s 2750.25-2751.50 lows, but under 2756.00.

Overnight action’s new info…
Quickly dipping attacked 2749.00 before reversing up more substantially. This morning’s 2759.00 bias-up signal held the first multi-hour consolidation. It broke higher after midnight, extending effortlessly through Europe’s opens, to probe 1 point above this morning’s 2765.50 bias-up target.

If, then…
Another night, another reversal setup. So, another reversal setup caveat, too. First, the setup. Overnight action has trended relentlessly in one direction. And not arbitrarily, but back to the bias-up signal. Back to the bias-up target. Through yesterday afternoon’s high (which printed before the bias environment had begun lapsing), and through yesterday’s late-morning high for added effect. Exiting the open above a prior high suggests that new sponsorship intends to extend the trending intraday. Yesterday’s last-minute bounce doesn’t disqualify an open above yesterday afternoon’s high from forming a “session-long rally” setup… And now, the caveat. Session-long rally setups can be as bearish as they would have been bullish, if the fully formed setup doesn’t trigger. How? Relentless overnight trending can often inhibit reinforcements at the open, having become more attractive to counter-trend sponsorship. We’ll know through the open, by whether a probed resistance is maintained or rejected. Regardless, be careful not to dismiss that post-open indication, especially if the overnight rally is maintained despite yesterday afternoon’s sellers having gained traction and having been only minimally productive before the close.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2763.50 would be likely to trigger the 2759.00 bias-up signal at 10:15. Exiting the open under 2757.50 would be unlikely to trigger bias-up. Exiting the open above 2768.75 would be likely also to exceed the 2765.50 bias-up target through 10:15 to renew the bias-up signal.