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…
Wednesday’s 11-point gap up consolidated through the open, holding above the bias-up target to renew the bias-up signal. The second hour resumed the overnight rally to first test 2715.00, which was the bounce limit for defining the rally as only a correction off of Tuesday’s 2675.00. Extending into the afternoon bias environment peaked upon testing the 2727.25 bias-up target, which was probed momentarily by 2 points. A sell signal triggered too late to be sponsored by strong hands, limiting its reaction down to only a minimum 2721.50 target. No “unfinished business above” was left outstanding.

Overnight action’s new info…
Yesterday’s late dip reacted back up through the close 5 points from its 2721.50 target to 2726.50. Globex gapped down to pierce what is this morning’s 2718.75 bias-down signal, which supported a brief consolidation that soon resolved back up. But resolving up only peaked upon retesting yesterday afternoon’s 2727.25 resistance, which has reacted back down to 2721.50.

If, then…
While Wednesday’s late dip to its 2721.50 target was sponsored by weak hands, the dip did serve to chip away at support there. Its intraday retest isn’t any likelier, but its intraday retest is now less likely to hold as support. Still, its break has room down to 2711.00 before signaling the trend reversing back down. Otherwise, having recovered to close above 2715.00, fresh highs are likely to probe above 2733.00. Meanwhile, keep in mind there is potential this week for a third session characterized by gapping open and running in the gap’s direction until fulfilling its objective. If today’s session is not that session — and it is currently indicated not to gap open — then that potential would compound and transfer to Friday.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2727.25 would be unlikely to trigger the 2730.00 bias-up signal at 10:15. Exiting the open above 2725.25 would be unlikely to trigger the 2718.75 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…
Last week had ended with a bearish opening setup whose influence tends to persist for several days, including Tuesday. Italy’s political instability also greeted the end of a 3-day holiday weekend, triggering an overnight slide that probed the lowest levels in over 2 weeks sown to 2690.00. Bouncing through the open briefly attacked 2710.00 and held “higher prior lows” before plunging to attack 2676.00. Its late-afternoon retest held, and recovered back to the afternoon’s 2691.50 high — more than 15 points off the lows but still down nearly 30 points from Friday’s close.

Overnight action’s new info…
Several swings between 2693.50 and 2685.50 contained price action before rallying into Europe’s opens. And out. No defensive posturing there, and so far no apparent need for it as the rally has extended relentlessly since then. Yesterday’s opening range is being probed up to 2707.75.

If, then…
Is the near-term bearish influence of Friday’s open done? Regardless, it is about to leave “unfinished business below” at the gap back down to yesterday’s 2688.50-2692.00 close. This is an attraction below, and not selling pressure. A trigger is still needed to resume the decline. Until then, more “higher prior lows” up to 2715.00 from the two-week range above can be tested and still contain the corrective bounce from yesterday’s lows.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2701.50 would be likely also to exceed the 2700.25 bias-up target at 10:15 to renew the bias-up signal. Exiting the open above 2698.00 would be likely only 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 probe above Wednesday’s highs up to 2737.75, fulfilling the likelihood that had been expected anticipated for two days. Its vulnerability to reversing down was anticipated as intraday action, but that already appeared as an 18-19 point slide to 2716.00 before Friday’s open. That also formed a bearish setup whose influence could persist after the weekend, having rejected fresh overnight highs to open back under earlier overnight lows. The bearish influence definitely persisted intraday by leaving “unfinished business above” at 2730.75 after holding a test of the morning’s bias-down signal. The afternoon’s fresh lows at 2713.75 didn’t extend down, which would have been surprising after already holding relevant support on a Friday morning. Bouncing into the close up to 2722.00 ended at 2718.00-2720.00.

Overnight action’s new info…
Sunday night’s gap up to 2730.75 was presumably triggered by news of the N. Korea meeting’s reinstatement. Being “unfinished business above” from Friday, its resistance held until Europe’s opens. Being a knee-jerk reaction to non-financial news, the gap up was retraced down to 2718.25 by Monday morning. The holiday Globex session ended unchanged from Friday’s close. Monday night’s firm open attacked 2725.00 then eventually gave way to 2717.50. Only a brief bounce delayed tumbling through Europe’s opens down to 2690.25, the lowest levels in over two weeks.

If, then…
Friday’s open had rejected the overnight probe above Thursday’s highs by opening under the earlier overnight lows. Unless recovered through the open or the close, the setup’s bearish influence tends to extend through the following open, or else for multiple sessions. Retracing Sunday nght’s gap up can be attributed to that influence, despite the gap’s catalyst being only temporary, since the headline’s retracement didn’t otherwise have any timing element. So, if the setup’s bearish influence is persisting beyond yesterday’s influence, then it’s likely to persist through today. A post-open bounce off of support is still possible, but bounces should resolve down. Isolating the plunge to the overnight is the minimum requirement to abandoning any near-term bearish outlook — not impossible, but requiring a significantly higher open, preferably above 2716.50.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2701.50 would be unlikely to recover the 2708.00 bias-down target by 10:15, renewing the bias-down signal, and essentially targeting 2683.50 and 2679.00.

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…
Probing above Wednesday’s 2733.00 high Thursday morning was all but obligatory. Which almost happened, if not for the knee-jerk reaction to the North Korea news. The morning plunged from 2730.50 down to 2705.75. But it was a non-market headline, making its retracement likely. Which happened, to within 3 ticks. “Unfinished business above” was left outstanding at Thursday afternoon’s 2732.00 bias-up target.

Overnight action’s new info…
Flat-to-higher narrow ranging eked back up to Thursday’s 2730.50 opening high. And then higher, briefly consolidating at the 2732.00 unfinished business, and then spiking up to what is Friday morning’s 2737.50 bias-up target. Sliding down to 2728.50 into and out of Europe’s opens (defensive posturing) wasn’t recovered immediately. And it then it wasn’t recovered entirely, bouncing only to 2735.00 before reversing down under 2725.00.

If, then…
The attraction of yesterday’s “unfinished business above” at 2732.00 would have helped to resume the rally Friday morning. But its test is already fulfilled overnight, as is the likely probe of fresh highs. They’re not UNlikely to be tested intraday, but that’s not required. And their retests won’t be likely at all if the open is already breaking back under the earlier 2727.00 overnight low, which is now being probed. Remember that the bullish influence of a 3-day holiday weekend has been undermined twice, and a third time shouldn’t be surprising. Recovering from negative territory through or before the open to probe fresh highs would still be vulnerable to reversing down, but much less so.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2727.25 would be unlikely to trigger the 2730.75 bias-up signal at 10:15. Exiting the open above 2733.00 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…
Greeting Wednesday’s open after collapsing overnight stumbled into a choppy morning. The wide 2708.50-2721.25 first swing was followed by 3 narrower, all supported by the overnight low’s base. Then the FOMC Minutes triggered a surge, before the afternoon bias environment had even come within view of lapsing. Tuesday’s closing bounce to 2727.25 was retraced, and extended up to 2733.00. That’s flat with Monday’s close, which was also trying to recover the 2732.00 upper-end of the prior Monday afternoon’s consolidation.

Overnight action’s new info…
Yesterday’s last-minute cash session high had started reacting down into the futures close, equating to 2731.00-2733.00. Globex quickly extended the reaction down further to attack 2720.00, where the direction almost immediately began reversing back up. Trending up both into Europe’s opens (no defensive posturing), and out, was retraced back to yesterday’s 2733.00 high. Its reaction down to 2727.25 is now trying to resume the initial overnight dip’s recovery.

If, then…
Wednesday’s recovery came from an overnight decline. The decline was substantial and poised to be very productive. That might trump the otherwise bullish seasonality of the upcoming 3-day U.S. holiday weekend. It’s not affecting Thursday’s open, but we may be discussing it tomorrow. Not recovering initial weakness through Thursday’s open would still be credible for retracing much or all of Wednesday’s recovery — perhaps even resuming the prior night’s decline. Meanwhile, not posturing defensively ahead of Europe’s opens has departed from the recent pattern. And the departure is being rewarded by extending higher without delay. Probing above yesterday’s highs this morning remains likely, which the seasonal bullishness could exploit for more upside follow-through, unless rejected early similar to Tuesday’s open.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2734.00 would be likely to trigger the 2732.00 bias-up signal at 10:15. Exiting the open under 2730.75 would be unlikely to trigger bias-up.