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 compensated for Monday’s failure to recover 2681.50. Probing it late Monday afternoon had dipped back under it through the cash session close, and barely settled back up at it. But overnight action had firmed and extended enough for the open to absorb a 7-point drop to 2692.50 without even threatening to re-enter Monday’s range. The opening dip was quickly absorbed, and the rally was quickly resumed. It extended into the noon hour up to 2708.50, and resumed coming out of the afternoon bias environment. The next higher objective at 2715.00-2722.00 was attacked to within 5 ticks during Tuesday’s last half-hour. Another pullback similar to the open’s dip still found time to test the morning’s highs down to 2705.50.

Overnight action’s new info…
Yesterday’s late reaction down from 2713.75 immediately extended a couple of points lower to 2703.75. The blip-down was retraced as quickly, and soon so was much of Tuesdays late reaction down. Flat-to-higher action since then has repeatedly pierced yesterday’s high, until now actually probing fresh highs up to this morning’s 2718.25 bias-up target.

If, then…
Maintaining a gap up Tuesday triggered by proxy the setup that almost triggered Monday afternoon, which points higher through this morning. That’s still likely, especially since the open isn’t indicated to gap down. Yesterday’s late dip also helped by restraining optimism, but too late for sellers to gain traction. That restraint continued overnight by remaining within yesterday’s range. And only now probing fresh highs comes early enough not to be considered last-minute, or doomed. That said, one bearish setup would quickly test 2722.00 and then reverse back under 2715.00. Otherwise, this afternoon’s resolution to a morning rally — extending higher, or reversing back down — could be a function of the Beige Book reaction and WedEX influences, along with the 2715.00-2722.00 objective’s status.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2715.00 would be likely to trigger the 2711.50 bias-up signal at 10:15. Exiting the open under 2709.50 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…
Monday did what all of last week’s attempts did not — closing above 2672.00. Sunday night’s gap up attacking Friday’s highs helped. Closing above 2672.00 was no longer enough to put into play the next higher objectives at 2715.00-2722.00. That now also included closing above 2680.50 and its room for noise up to 2681.50. Monday’s cash session close didn’t reject 2681.50, so much as dipping 5 points back under it. Futures settled at 2681.50, still not fulfilling a breakout.

Overnight action’s new info…
Holding 2681.50 through  Monday’s close didn’t prevent resuming the rally overnight. Monday’s 2687.00 high was pierced momentarily into and out of Asia’s opens. Firmly recovering wasn’t prevented by weak economic data from China, extending up to 2696.00 ahead of Europe’s opens. A correction to 2688.00 has now been recovered back up to 2696.00.

If, then…
Buyers gained no traction for their efforts Monday, so only gapping up would be reliable for extending higher. This morning’s 2691.00 bias-up target has already been probed by 5 points. Almost every bullish template is active on this setup. Generally, either immediately extending the gap up or absorbing a post-open reaction down would be credible for trending up intraday. We had discussed a late-afternoon setup that reacted down instead of up, which would have pointed higher through Wednesday morning — maintaining a gap up would put that setup back into play.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2692.50 would be likely also to exceed the 2691.00 bias-up target at 10:15 to renew the bias-up signal. Exiting the open above 2688.50 would be likely at least to trigger the 2684.50 bias-up signal at 10:15.

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 rally had peaked at Friday’s opening bar, 1 tick short of its 2680.75 bias-up target. Reversing down under its 2672.00 bias-up signal had put into play only a test of its 2654.00 objective — which was fulfilled at the morning’s 2651.00 low — but its 2648.25 bias-down target was met anyway during the afternoon’s drop. Despite getting sucked into the air pocket under Thursday’s range down to 2645.00, the close recovered back above 2654.00, like the morning, and prevented signaling a “hold-short.

Overnight action’s new info…
Bombing Syria during the week would have likely sent the market down sharply. Waiting until after Friday’s close at least allowed the weekend to pass, a weekend without retaliation. Sunday night’s open gapped up in relief to and through 2672.00 and extended to 2677.50. Reversing down to test 2661.00 stopped 3-4 points short of Friday’s close, which was close enough for Europe’s opens. Much of the reversal was retraced to 2675.00, which is being consolidated down to 2672.00, including a temporary blip-down to 2670.00.

If, then…
Is the overnight rally’s catalyst any more relief that Friday’s salvo may go unanswered? A steady flow of negative news items other than Syria were absorbed last week, so an actual positive development could be a very bullish catalyst. Only closing above 2672.00 would have been bullish last week before probing above it. Extending above Friday’s 2680.50 high could be bullish if maintained through a relevant timing window. But probing last week’s highs and closing back under 2672.00 could be more bearish this week than last week.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2668.00 would be likely at least to trigger the 2664.50 bias-up signal at 10:15. Exiting the open above 2675.00 would be likely also to exceed the 2672.75 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…
Gapping up Thursday was the only path higher after having failed to gain traction Wednesday. Gapping up above Wednesday afternoon’s 2655.00 bias environment high went further, forming a “session-long rally” setup. Surging through the first hour had already attacked the next higher objective at 2672.00. Two more tests of the objective held through the balance of the session, but their timing still fulfilled the setup’s requirement that all but one window probe its prior timing window’s high. A very last-minute collapse fell 8-9 points into the close.

Overnight action’s new info…
Thursday’s last-minute collapse lasted longer than that. The Globex open immediately spiked down and soon extended the drop to 10-12 points under Thursday’s late lows at 2652.00. Hovering just above this morning’s 2654.00 bias-down signal began firming by midnight, and had retraced the initial drop into Europe’s opens. The recovery extended into positive territory, already probing back above 2672.00 by 1 point.

If, then…
The morning following a session-long rally tends to extend higher. Quickly dropping 10-12 points after the Globex open made fresh highs difficult, due both to momentum and to math. Having already recovered the initial overnight drop, both momentum and math are back on the side of probing fresh highs. Gapping up or not could dictate the morning rally’s likely resolution — probing higher highs without gapping up would be doomed to failure. Gapping down is still possible, but would still be likely to rally through the morning. Sell signals will be considered anyway, especially if the bias-up signal holds its test instead of triggering.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2669.00 would be unlikely to trigger the 2672.00 bias-up signal at 10:15. Exiting the open above 2673.50 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…
Wednesday’s open was greeted above Tuesday’s 2635.00-2638.50 lows. That might seem uneventful, except for the overnight event of having slid well below Tuesday’s range to 2626.00. The probe under Tuesday’s range was isolated to the overnight night, which likely marginalized sellers for the day (it did) and created potential for trending up (it didn’t). Day-two of Zuckerberg’s testimony provided distraction, and the afternoon’s impending FOMC Minutes provided anxiousness. Distraction and anxiousness combined to keep Wednesday range bound essentially within 2640.00-2662.00 for a second consecutive session. A late dip held a retest of the morning’s 2640.00 low, avoiding a much deeper meltdown.

Overnight action’s new info…
The first reaction to Wednesday’s late dip firmed up to 2651.75, barely attacking yesterday afternoon’s 2655.00 bias environment high. That was gradually retraced entirely, into and out of Europe’s opens, back down to 2640.00. Sitting on the precipice didn’t last long as its reaction quickly recovered, to and through the overnight high to probe yesterday afternoon’s 2655.00 bias environment high up to 2656.50.

If, then…
Retesting Tuesday night’s dip to 2626.00 was likely unless Globex rallied overnight to gap up Thursday. Globex is rallying, just in time to still be considered overnight. But it’s only now encountering its first resistance test, so it’s too soon to be reliable. Resistance being tested is yesterday afternoon’s 2655.00 bias environment high, and having trended down into yesterday’s close, gapping up above 2655.00 could form a “session-long rally” setup. Holding a test of 2655.00 could be as bearish as its recovery would have been bullish. So, forming the session-long rally setup without triggering it would likely target an intraday drop to Tuesday night’s 2626.00 low and lower. Otherwise, rallying could be limited to 2672.00 or else extend to 2715.00-2722.00.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2655.00 would be likely to trigger the
2650.50 bias-up signal at 10:15. Exiting the open under 2647.75 would be unlikely to trigger bias-up.