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’s open stretched the rubber band. Just a little, immediately fulfilling the morning’s 2741.50 bias-up target. Then it snapped back down. Just a little, filling the gap back to Monday’s close, which was at the upper-end of last Monday afternoon’s 2725.00-2732.00 consolidation. That stopped short of retracing the entire overnight rally. But the afternoon bias environment’s exit at 2737.50 made up for the delay, sliding through the close down to 2721.50 support. Bouncing through the close touched 2727.25 resistance, but didn’t recover it.

Overnight action’s new info…
Extending down without delay was likely, as we discussed at yesterday’s close. Satisfying an objective but not yet retracing its last support (or resistance) tends to invite reinforcements. Last night’s action fulfilled this setup, eventually resuming the decline to test fresh lows at 2717.00. Bouncing ahead of Europe’s opens (NO defensive posturing) resolved down sharply, resuming the decline to 2704.50.

If, then…
2704.50 is an important area. Its test formed the week-old low that ended the prior drop from 2741.00. Now yesterday’s retest of 2741.00 has formed a Double Top, making the 2704.50 area its interim low. After correcting the pattern with a drop targeting 2675.50-2677.25, the rally often resumes. Not always — a Double Top can be durable. Resuming the rally before fully probing the Double Bottom’s interim low can make its eventual top more durable. The downside can quickly unfold if post-open bounces hold Thursday-Friday’s 2712.00-2713.00 “higher prior lows” as resistance. Otherwise, any bullish scenario at least requires recovering 2717.00. Meanwhile, the impending 3-day holiday weekend’s seasonal bullishness (i.e. flat-to-higher influence) makes today THE day for bigger money to position during maximum liquidity. So, holding or breaking the interim low’s test today would likely dictate price action into the weekend.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2711.00 would be likely also to exceed the 2713.00 bias-down target through 10:15, renewing 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…
Yesterday was choppy and busy, but is essentially defined by 2-3 bigger surges and their retracements. Sunday night’s gap up from Friday’s 2712.00 close extended up to 2736.25. That was a sentiment extreme and spent the balance of the night retracing down to 2724.50. Monday’s opening surge retested it, and then probed it by 3 points up to 2737.25. The balance of the morning was spent retracing that to within 3 ticks of the overnight low at 2725.25. An afternoon bounce recovered only to the overnight high before ranging sideways into the 2733.00 close. The close was still overlapping the upper-end of last Monday’s 2725.00-2732.00 consolidation.

Overnight action’s new info…
An initial calm soon began firming, and then rallying, and eventually extended back up to within 1 tick of yesterday’s 2739.25 high. Not being intraday, that isn’t considered as stopping pessimistically short, but it is a retest. And it’s interesting that there was no defensive posturing ahead of Europe’s opens, which is optimism.

If, then…
Testing the lower-end of last Monday’s 2725.00-2732.00 consolidation last week had reacted down several times, sometimes considerably. Closing decisively above the consolidation’s upper-end would have signaled a new upleg underway. Since still overlapping 2732.00 at yesterday’s close hasn’t reversed down overnight, quickly attracting reinforcements could still extend a breakout up to 2751.00 before failing. Quickly attracting reinforcements, or not, could dictate the balance of the session — especially after a single-minded overnight rally, which is inherently vulnerable to reversing at the open.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2737.50 would be likely to trigger the 2735.25 bias-up signal at 10:15. Exiting the open above 2743.00 would be likely also to exceed the 2741.50 bias-up target at 10:15 to renew the 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 7-point rally had reversed down 14 points overnight to 2727.00. Friday’s expiration session started off choppily in negative territory, and soon extended the overnight dip by another 4 points to 2709.00. That was only temporary as the balance of the session ranged between the 2712.00 pre-open low, and unchanged at 2720.00. This otherwise sideways range was also defined by lower highs, and ended at its lower-end, barely fulfilling the afternoon’s bearish WedEX influence.

Overnight action’s new info…
The new week begins with a relief rally. Or, more precisely, a relief gap up. Treasury Secretary Mnuchin had commented about backing off of the trade war with China, and Giuliani speculated about soon ending the Mueller probe of Trump. Sunday night’s open gapped up sharply and extended to a 21-point gain from Friday’s close to touch 2736.25. Price quickly settled back down to range narrowly at 2730.00. The calm was interrupted by sliding for an hour to greet Europe’s opens at 2724.00. The defensive posturing has been retraced back up to 2730.00, but no higher.

If, then…
Having complied in at least a minimal sense with the bearish WedEX Friday afternoon, a more obvious post-open bearish influence is likely Monday morning. This is regardless of the opening print, which is indicated to gap up. The overnight high isn’t a “new Globex trend extreme” that would require intraday retest. Except for the opening 15 minutes of volatility’s potential for volatility, the balance of the morning should trend down. WedEX’s influence is limited to the morning. Assuming the bearish influence succeeds, then the afternoon could recover entirely — similar setups have done exactly that. But the current Dow outperformance and underperforming NDX make further downside likelier into the close. That’s a lot of bearish influence. So, avoiding a bearish influence altogether this morning should prove very bullish instead.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2725.25 would be likely at least to trigger the 2719.00 bias-up signal at 10:15. Exiting the open above 2730.75 would be likely to exceed the bias-up target through 10:15 to renew the 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 morning’s rally repeated Wednesday’s equally doomed attempt, doomed for buyers not having gained traction the prior day. That usually means they don’t try, but in these these past two instance they did. So, despite quickly recovering from a  post-open 7-point plunge that probed overnight lows down to 2713.50, the morning bias environment reversed up to touch 2732.00. And despite having touched 2732.00, the afternoon bias environment reversed down sharply to touch 2711.00. A 12-point bounce into the close only pierced positive territory before dipping to attack 2716.00 into the close.

Overnight action’s new info…
A choppy range was able to get back up to resistance, and has converted it into support, but has been unable to get away from it. Blipping-down to retest 2716.00 snapped back up to the late-afternoon bounce’s 2723.00 peak — resistance. Probing gradually higher and higher eventually surged up to 2727.00 through Europe’s opens. No defensive posturing preceded it, which was unusual for this week. Which may explain the quick reaction down to 2720.00. Another attack on 2727.00 is also reacting down, back to 2723.00 — now support.

If, then…
At least it sounds bearish. Ill-timed rallies that doomed them to failure, tests of higher prior lows and prior highs that were rejected back under support, recovered dips that failed to gain traction. But sellers have yet to exploit these upside weaknesses. Yesterday’s rejection of the morning’s fresh recovery high by the afternoon’s complete retracement back down to the morning’s low still closed above Wednesday’s prior low. Although sellers gained no traction otherwise, but they can by proxy of opening weakly enough this morning. But there’s no assurance of that, as bearish WedEX’s influence is scheduled for this afternoon.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2727.25 would be likely to trigger the 2725.25 bias-up signal at 10:15. Exiting the open under 2721.50 would be unlikely 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 night’s initial dip down to 2704.25 had gradually recovered 7-8 points to unchanged. Briefly probing higher to attack 2715.00 was reversed back down to 2704.25. “If at first,” right? Well… The half-hour preceding Wednesday’s open recovered back up to unchanged and the open quickly extended through it to probe the overnight highs. The noon hour’s higher highs touched the afternoon’s 2727.25 bias-up target, before bias-up was even triggered, so the bias environment only ranged sideways. The final hour’s failed attempt to break higher was instead snapped back down to 2717.50, where a snap back up barely recovered back above the morning’s highs to 2723.00. WedEX triggered a bearish signal.

Overnight action’s new info…
Wednesday’s late recovery firmed only a little higher into Globex’s open, and then began reversing down. Gradually at first, retracing 61.8% of the bounce back down to 2720.00. The rest was retraced into Europe’s opens to within 1 tick of this morning’s 2715.75 bias-down signal (defensive posturing?). Since then, the market is ranging around yesterday’s late 2717.50 low.

If, then…
Several factors have warned us that yesterday’s rally was sponsored by weak hands. The pre-open defensive posturing, rallying sharply to peak during the unpredictive noon hour, peaking during that window at a target, and holding a test of “higher prior lows.” All of which could be overcome by gapping up today above the 2732.00 upper-end of those higher prior lows, the opposite of which is indicated by the overnight action. Any shallower post-open strength would be vulnerable to failure. Now the question is whether that bearishness takes control post-open to retrace the rally back down to Tuesday’s lows. Posturing defensively ahead of Europe’s opens hasn’t reacted with a relief rally, so repeating the same sentiment could actually restart yesterday’s late reversal down.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2714.00 would be likely to trigger the 2715.75 bias-down signal at 10:15. Exiting the open above 2723.00 would be unlikely to trigger bias-down.