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…
Optimism was alive and, well, waning ahead of Wednesday’s FOMC events. The morning’s sponsorship triggered bias-up but left its 2798.00 target outstanding. It was attacked it to within 2 points at the morning’s retest of the 2796.00 overnight high, and becomes “unfinished business above.” Drifting lower through the noon hour greeted the FOMC statement at 2792.00. Its reaction down extended to 2781.50, which was retested after bouncing to 2793.50. The cash session close was testing 2779.00-2780.00, and futures settled another 2 ticks lower.

Overnight action’s new info…
Choppy ranging around Wednesday’s close eventually trended down, breaking to fresh lows after midnight. Bottoming soon after Europe’s opens, bouncing since then has retraced back up to yesterday’s 2779.00-2780.00 close, testing natural resistance at unchanged.

If, then…
Isolating the probe under yesterday’s low to the overnight could form an Isolation setup targeting a retest of yesterday’s high. Just holding above yesterday’s 2779.00-2780.00 late lows would be less convincing than to recover Monday-Tuesday’s 2783.00-2784.00 support. Recovering 2788.00-2788.75 through the open would be most convincing, and could also serve by proxy to invert yesterday’s late bearish WedEX. Perhaps that was only a temporary product of defensive posturing ahead of this morning’s ECB policy statement and Draghi Q&A. Otherwise, rallying this morning from a shallower open is still possible, even without exploiting the Isolation opportunity, or inverting the bearish WedEX. Delaying a rally this morning isn’t likely to rally at all, because then the paradigm is probably already shifting to the downside.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2780.50 would be unlikely to trigger the 2773.50 bias-down signal at 10:15. Exiting the open under 2784.00 would be unlikely to trigger the 2786.00 bias-up signal. Exiting the open above 2788.75 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…
Monday’s late drop to 2784.00 had defined the overnight range, which was tested repeatedly to as low as 2782.25. Tuesday’s open was greeted back at the overnight range’s 2791.00 upper-end, which eventually extended up to 2794.00 at noon. Dropping into the final hour attacked the 2782.25 overnight low, where one more bounce took price back up to 2791.00. No new “unfinished business” was left outstanding, while the relevant 2793.00 level held a second consecutive test.

Overnight action’s new info…
Tuesday’s final hour bounce extended into the Globex open, and soon probed fresh highs up to 2796.00. The probe above the prior session’s highs — like Sunday night’s probe of fresh highs — was retraced back under prior intraday highs to 2789.25. Retraced, but not necessarily rejected. Now yesterday’s 2794.00 high has been recovered.

If, then…
The pattern remains alive as another probe above prior highs is reversed. Last night was the second overnight reversal, and yesterday’s intraday reversal originated from a couple of ticks short of a fresh high. So, today may be the last opportunity for the distributive pressures to prove whether its sponsorship has been strong-handed. The strong hands in this pattern may have been patient sellers letting buyers expend their energy. The pattern often ends in a threatening downdraft that extends or is miraculously saved, accelerating in either direction. This series of higher highs hasn’t yet included sucha make-or-break crossroads, but the combination of failed probes while creeping closer to the 2800.00 area makes a reckoning likelier.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2790.75 would be unlikely to trigger the 2792.50 bias-up signal at 10:15. Exiting the open above 2795.00 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…
Sunday night’s action had promised an active session, and Monday didn’t disappoint. The overnight gap down to 2774.00 had been recovered to fluctuate around Friday’s 2782.50 close up to 2786.50, greeting Monday’s open above prior highs at 2784.00. Having escaped last week’s pattern of rejecting early fresh highs — or, at least, absorbing the pattern when it developed overnight — the morning did almost nothing. Actually, the morning did do one thing, ranging up to 2788.50, before the noon hour extended to 2794.25. No traction was gained during the afternoon, leaving the final hour to fluctuate narrowly sideways. A very late break under 2790.00 collapsed quickly to 2784.00-2785.00, but its timing was too late to be predictive, if it’s even sustainable.

Overnight action’s new info…
The late break proved to be temporary — three times. It was recovered completely soon after the Globex open, back up to Monday’s late sell signal at 2790.75. And then another collapse retested the 2784.00 low. Another recovery was also retraced by another collapse. Yet another recovery finally probed a fresh high up to 2792.00 into Europe’s opens. That’s three recoveries, but now fresh lows are probing yesterday morning’s low down to 2782.50. This leg isn’t a collapse, and there’s no current attempt to recover it.

If, then…
Yesterday’s 2794.25 high tested and held the rally’s next higher objective of 2793.00. There’s room for noise above it that could be tested by another recovery of yesterday’s late drop. But there’s no requirement for another recovery of yesterday’s late drop. This area is the last opportunity to end a correction before starting to require new all-time highs. Regardless, last week’s distribution and rotation out of leadership still threaten to repeat its pattern of rejecting a probe above the prior session’s highs — and a probe above the prior yesterday’s highs would be the likely objective of any post-open rally. Otherwise, even the most bullish longer-term scenario isn’t precluded from launching a pullback here, which is already underway if the open isn’t rallying.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2793.00 would be likely to trigger the 2790.25 bias-up signal at 10:15. Exiting the open under 2788.00 would be unlikely to trigger bias-up. Exiting the open above 2787.00 would be unlikely to trigger the 2782.00 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…
Thursday’s intraday sell-off down to 2763.75 had not gained traction for its effort. That didn’t prevent probing lower overnight down to 2755.75. But the lack of intraday traction may have prevented the overnight sell-off from extending. Or from even being maintained. The fresh lows were already recovered before Friday’s open to form a bullish Isolation setup. The morning’s choppy start was entirely appropriate for the setup, as was the afternoon’s relentless trending. The setup’s likely objective to retest Thursday’s 2783.25 high was touched at the close. Both bias setups were also fulfilled, and no “unfinished business” was left outstanding.

Overnight action’s new info…
Sunday night’s open gapped down to immediately test relevant support from Friday at 2775.00. That was the extent of selling pressure, other than a quick retest of the open’s 2774.00 low. But Friday’s 2782.50 close was soon attacked to within 1 point. A 4-point pullback was already recovering into Europe’s opens, and extended to touch what is this morning’s 2786.50 bias-up signal. Now Friday’s 2782.50 close is being tested as support.

If, then…
Perhaps the most relevant influence to monitor at the moment is last week’s pattern of rejecting early probes above prior highs. There were four, and there were different versions among them. Some of the reversals developed earlier than others, but last night’s would be the earliest if it qualifies through the open. That can cut either way, so not rejecting the fresh high would be bullish for extending higher this morning. Not rejecting the fresh high needs some work, since the fresh highs is currently struggling to hold above Friday’s high. It’s premature at this moment to call it either way — check the Market Tour recording for tactical discussion — but it’s not too late for reversing down to threaten the earlier 2774.00 Globex low. Exiting the open below it, like Friday’s fulfilled Isolation setup, would signal weakness through this morning or through tomorrow morning.

First Trade…
[Click here to view the Bias parameters] Exiting the open under 2784.00 would be unlikely to trigger the 2786.50 bias-up signal at 10:15. Exiting the open at 9:45 above 2778.50 would be unlikely to trigger the 2777.50 bias-down signal. Exiting the open under 2774.00 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…
Thursday’s open continued this week’s tradition of surging in some way — gapping up, recovering a post-open blip-down, simply surging — and then reversing down. The 13-point dive was measured as much as any previous reversal, but the half-hour timing was its fastest. So fast, that it left time for another bounce to also reverse down, this time 14 points and to fresh session lows. That was recovered to attack Wednesday’s highs, stopping short of a higher close that would have confirmed Wednesday’s breakout. No “unfinished business below” was left outstanding and sellers didn’t gain traction for their efforts. .

Overnight action’s new info…
Selling has resumed. Fluctuating around the 2774.00-2776.00 close began resolving down before midnight. Europe’s opens were greeted at 2766.50, which is a 61.8% retracement of the Double Bottom at yesterday’s lows. Its natural support held briefly before resolving down sharply to fresh lows at 2755.75. Price has been consolidating back up to the Double Bottom’s 2764.00 low.

If, then…
The trend had not reversed down through yesterday’s close, and yesterday’s sellers had not gained traction for their efforts, leaving potential for bouncing today back up toward yesterday morning’s highs. Probing lower overnight makes bouncing more difficult, but not if yesterday’s lows are holding as support through the open. Gapping down under Thursday afternoon’s lows would gain downside traction by proxy, forming a “session-long decline.” Isolating the fresh lows to the overnight would be bullish. Regardless, I would still beware of potential for an opening surge to fail anyway. Either way, Friday Factors are likely to exaggerate any resolution. Relative performance yesterday between NDX and the Dow will be very bearish if repeated today (I elaborate on this during today’s pre-open Tour, linked above).

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2759.00 would be unlikely to recover the 2761.50 bias-down target at 10:15, renewing the bias-down signal. Exiting the open under 2765.50 would be likely at least to trigger bias-down at 10:15. Exiting the open above 2770.00 would be unlikely to trigger bias-down.