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…
Tuesday night’s attack on its 2756.75 bias-down target had recovered to greet Wednesday’s open at its 2773.50 bias-up signal. That would be important at 10:15. Meanwhile, more important was whether the gap up would be maintained through the open, and preferably also extended. That was the only way to extend higher Wednesday, since Tuesday’s buyers had failed to gain traction. The gap up was maintained, but not extended. And then it wasn’t even maintained, failing to trigger the bias-up signal it was already testing. That put into play an objective below at 2763.00 which was not attacked any nearer than natural support at 2767.00. Triggering the afternoon’s bias-up signal put into play its 2779.75 target, which was attacked to within 2 points. Both 2767.00 and 2779.75 became “unfinished business.”

Overnight action’s new info…
For a single session to form BOTH sponsorship AND counter-trend sponsorship that triggers widely disparate objectives, already reflects an unstable market. Preventing either objective from being fulfilled is instability — squared. So, we ended yesterday by looking for S&Ps volatility to expand sharply Thursday. And it looks like overnight action got the memo. Globex’s initial 2770.00-2775.00 range gradually expanded to attack 2777.00 and then surged to test 2785.00. That was already retracing back down before midnight. Europe’s opens were greeted back down at 2777.00, and the slide extended sharply lower to 2762.00. Now a bounce is touching 2770.00, yesterday’s late low.

If, then…
From yesterday’s Market Wrap: S&Ps volatility should expand sharply Thursday, whether ranging more widely or trending sharply. How about a little of both. Each of the “unfinished business” above and below were met — including another gap fill, which combines with yesterday to make a pair. Now the overnight 23-point reversal is trying to recover back into yesterday’s range. It will probably find that 2767.00 has more intraday influence than it does overnight. And probing even 3 points above it (which is testing this morning’s 2769.50 bias-down signal as resistance) is still likely to resolve down to retest or attack 2756.00. Also, reversing the overnight probe above yesterday’s high back under the earlier 2770.00 overnight low, through this morning’s open, would point down aggressively through this morning, if not also through tomorrow morning. Having said all that, forming all of the basis for reversing down, but holding, would be as bullish as it could have been bearish.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2763.00 would be unlikely to exceed the 2761.50 bias-down target at 10:15 or to renew the bias-down signal. Exiting the open under 2767.00 would be likely at least to trigger the 2769.50 bias-down signal at 10:15. Exiting the open above 2774.00 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…
Monday’s opening retest of 2767.00 had put into play an eventual test of 2756.00. Rallying Monday didn’t prevent trending down overnight (on US-China tariff war escalating) to probe 20 points under 2756.00. Rallying pre-open didn’t extend much higher for long post-open. But the session ultimately recovered to test 2767.00 by 2 points. Closing above 2756.00 indicated that sellers gained no traction for their efforts. Closing above 2767.00 would have indicated buyers gained traction for theirs. The close wasn’t decisively above 2767.00, but it was still impressive.

Overnight action’s new info…
Choppiness well before midnight had already rivaled the intraday action. Rallying from the overnight low has rivaled Tuesday’s intraday action, too. First, a 4-point dip to this morning’s 2763.00 bias-down signal reacted up to fresh highs at 2769.00, then collapsed to within 2 ticks of this morning’s 2756.75 bias-down target. Its quick recovery up to 2767.00 was retraced once more down to 2763.00, but recovered again. That was the end of that, as the market surged up to 2775.00. But fluctuating around this morning’s 2773.50 bias-up signal into and out of Europe’s opens, and gradually firming another point, is now reacting down to 2770.50.

If, then…
The market has an interesting property when closing at support or resistance: immediately extending the trend requires gapping. So, we discussed at yesterday’s closing test of 2767.00 that rallying at all this morning would require gapping up. And preferably gapping up above 2773.50, which is also this morning’s bias-up signal. Now its overnight test positions the open for that gap up, which can easily extend to fill Monday and Friday’s 2778.00 and 2785.00 gaps. Or more, with the next gap outstanding at 2788.00 and “unfinished business above” 8-10 points higher, although two gap fills in a single session tend to be a session extreme. But the upside all depends upon at least triggering the 2773.50 bias-up signal, preferably maintaining a gap up and extending it. Holding its test and reversing down may not resume the decline, but overnight lows could be retested.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2770.25 would be unlikely to trigger the 2773.50 bias-up signal at 10:15. Exiting the open above 2777.00 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…
There was nothing near-term bullish about retesting 2767.00 Sunday night and post-open Monday. Having held Friday to launch its intraday rally, its support properties were deleted, and now the decline must extend to test 2756.00. Quickly rejecting the overnight and intraday dip might have avoided the extension, except that the opening 15 minutes of volatility were still holding at or under 2767.00. More at than under, in this case. And that included gapping down through both bias-down parameters, expending a lot of energy. But it created a position of weakness, and any rally it launched would be doomed to failure. The morning rallied back up to its 2778.00 bias-down signal, which the afternoon retested before probing by 2 points through the close.

Overnight action’s new info…
The party got started early last night. A quick retest of the 2780.00 post-close high reacted back down to 2778.00, and then plunged to 2762.50 on the announcement of new tariffs against China. Consolidating back up to 2767.00 plunged again to 2753.50 — possibly on news of China striking back, perhaps in reaction to news that General Mattis is visiting South Korea to reinstate their previously called-off joint drills. Regardless, consolidating around 2756.00 slid another 20 points into and out of Europe’s opens to test 2736.00. Bouncing since then has tested 2751.50.

If, then…
Unless already rejected overnight, the objective of Monday’s late break was to fill the gap back up to Friday’s 2784.50 close, at least 5-7 points higher if not 10. Any higher would have started putting into play the 2796.00 and 2798.00 objectives above. Unless already rejected overnight, which is the case. Exceeding 2756.00 by 20 points does not change the bearish-bullish path described Saturday, that started tracking Monday — to avoid further delay in testing 2756.00 so that selling pressure couldn’t refuel. Buyers didn’t gain any traction for Monday’s bounce, which did refuel selling pressure to a degree. The question is whether that added degree of refueling is being fulfilled by the overnight lows and their intraday retest. The answer will be in whether 2756.00 is recovered through the close.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2756.00 would be the best chance at rallying back up to 2767.00, regardless of the resolution from there.

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’s inside day persisted overnight until Europe’s opens. Then price action compensated for the delay. Ranging around Thursday’s 2788.00-2788.75 close broke lower to 2773.50, then fluctuated choppily between 2771.00-2782.00 through Friday’s open. A mid-morning plunge held a critical test of 2767.00 lower prior highs, and quickly recovered well before noon — leaving behind oversold RSIs that still require a retest. The afternoon bias environment exit surged to nearly fill the bap back up to Thursday’s close, holding at or above 2383.00-2384.00 through Fridays close. Bearish WedEX was nominally influential, if at all.

Overnight action’s new info…
Sunday night’s open blipped-down to 2779.00 and snapped back up to attack 2787.00. The blip-down was repeated, slower at first, and then becoming a plunge to 2772.25. Flat-to-lower ranging is now attacking Friday’s low to within 1 point at 2766.50, erasing almost all of Friday’s recovery

If, then…
Oversold RSIs at Friday’s low require a retest, which can be neutralized at before the open. Testing it before the open can still use its support to launch a bounce. Maybe touching 2767.00 post-open and recovering through the opening 15 minutes can also bounce this morning. But there’s otherwise no bullish reason to be revisiting 2767.00, and its retest would likely extend down to 2756.00. That said, impatiently resuming the decline immediately does have the best chance at recovering sooner. The bearish WedEX didn’t trigger decisively Wednesday and wasn’t rejected decisively Thursday. So, I hesitate to infer anything from its limited influence Friday afternoon. But I would anticipate relentless trending through Monday morning in the opening 15 minutes’ direction, until disproved.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2775.00 would be likely to trigger the 2777.50 bias-down signal at 10:15. Exiting the open under 2769.50 would be likely to exceed the 2772.00 bias-down target at 10:15 to renew the 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…
Thursday’s open was greeted back above the 2783.00-2784.00 support that had defined Monday-Wednesday’s lower-ends. That is, until Wednesday’s late break down to 2779.00-2780.00. Gapping back up and maintaining it formed an Isolation setup that would prevent sellers from gaining any traction for their efforts. But it couldn’t prevent them from trying, which is usual on the Isolation setup’s morning. So, a post-open surge up to 2794.00 reacted back down to 2781.00. Although the dip was recovered by noon to within ticks of the 2790.50 open, the balance of the session only ranged choppily sideways. And that is NOT usual for the Isolation setup’s afternoon. But it’s not yet disqualifying to maintain its objective to retest Wednesday’s 2796.00 high, and incidentally also unfinished business above at 2798.00.

Overnight action’s new info…
Thursday’s last swing ended back within ticks of the 2790.50 open. A hold-long setup narrowly avoided triggering. So, a dip initially returned down into the 2783.00-2784.00 range, and then recovered back up to the 2788.00-2788.75 range. But no overnight strength developed that would have been credible for extending higher. Which was explained at Europe’s opens, as forthcoming US trade tariffs on China are being blamed for triggering a quick slide to 2773.50. (Rumors are also surfacing of Merkel’s government being on the verge of collapse.) A blip-down just briefly probed a fresh low down to 2772.00.

If, then…
Avoiding a hold-long setup at yesterday’s close only indicated the vulnerability to overnight weakness, but it didn’t predict a drop. And now the market is responding to headlines that are not new, so they are already somewhat discounted. Which is not to say the market isn’t justified in discounting them more, but those discounted dips often snap back up. Meanwhile, there’s a race between fulfilling a couple of upside attractions, and eventually fulfilling the distribution that we’ve been discussing for the past two week. We’re still expecting a bearish WedEX influence this afternoon, regardless of the environment or level that greets it. In the interim, this being a Friday, the morning’s bias tends to persist through Friday’s noon hour. Other Friday Factors will be relevant, too. Like sponsorship being difficult to generate, and counter-trend sponsorship being more difficult. But counter-trend sponsorship always becomes easier to generate at a test of support/resistance. So, cobbling together a morning rally would still have plenty of resistance above.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 back above 2783.00 would be unlikely to trigger the 2782.00 bias-down signal at 10:15. Exiting the open under 2778.75 would be likely to trigger bias-down signal. Exiting the open under 2774.00 would be likely also to exceed the 2775.00 bias-down target at 10:15 to renew the bias-down signal.