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 gap up extended to 2597.50 before reacting down almost 25 points to 2573.25, and filling the gap back to Monday’s close. The 2687.75 bias-up signal had already failed to trigger, putting into play an offsetting test of its 2566.50 bias-down signal. That didn’t prevent the balance of the morning from rallying to fresh session highs. Its no-bias trending could have been invalidated by exiting the bias environment above its 2601.50 bias-up target. The target held as resistance despite being probed up to 2605.50, so it wasn’t for lack of trying that 2566.50 became “unfinished business below.” That still didn’t prevent extending higher, albeit after another 25-point dip to 2580.00. Late highs attacked 2619.00 and took RSIs simultaneously overbought before reacting down to 2603.25.

Overnight action’s new info…
Another trade war attack by China has retraced yesterday’s rally. Swallowed it whole. Bouncing out of Tuesday’s late pullback had never recovered to retest intraday highs. Price soon began drifting back down and retested the pullback’s 2603.25 low by 3 ticks. Flat-to-lower ranging accelerated its pace into and out of Europe’s opens. Headlines soon triggered a plunge through yesterday’s low to 2569.25. A 2-hour consolidation back up to 2580.00 broke lower to 2559.50. That break has been retraced back up to the consolidation’s “lower prior highs” at 2574.00.

If, then…
Avoiding a repeat of Monday’s plunge on Tuesday probably wasn’t bullish. But it left only a very narrow window for tracking the 1987-style crash template — by trending down sharply Wednesday either without delay or by the morning bias environment exit. Having trended down sharply already overnight, a flat or flat-to-higher morning is possible. But the crash template is fueled by intraday selling, and would require resuming the decline aggressively this afternoon. Regardless of the character or path there, 2509.00-2511.00 remains the next lower objective.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2580.50 would be likely also to exceed the 2585.75 bias-down target through 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…
Sunday night’s narrow sideways range could have resolved either way, despite already probing 14 points under Friday’s 2642.00 close. Monday’s plunge tracked the only bearish template in operation at the open. While it fulfilled this leg’s likely objectives of retesting the recent 2796.00-2698.00 and 2585.00 lows, they weren’t required the same day. The late bounce from 2552.00 touched 2585.00 as resistance before backing off 5 and 10 points into the cash session and futures closes. Maintaining its break confirms the next lower objective in-play is 2509.00-2511.00.

Overnight action’s new info…
It’s almost the opposite of yesterday. Monday’s late reaction down from 2585.00 was eventually retraced, and then probed up to 2589.00. But only momentarily, as the balance of the night has been sideways in a 10-point range around 2585.00. Flat-to-higher, slightly, as 2590.00 was just touched, but its reaction is heading back down to 2585.00. The description nearly matches yesterday’s, albeit probing slightly higher instead of slightly lower.

If, then…
The objectives of Monday’s template didn’t have a timing element, and neither does the next lower objective. But duplicating Monday’s plunge on Tuesday would introduce a likelihood of extending down aggressively, perhaps even tracking the 1987-style crash template. The overnight range’s restrained optimism would be bullish intraday if the opening 15 minutes of volatility becomes less restrained and more optimistic. That’s credible, but not the likeliest resolution. Meanwhile, immediate post-open weakness could quickly retrace all of the post-close gains, and still be targeting a probe under yesterday’s lows.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2593.25 would be likely to trigger the 2587.75 bias-up signal at 10:15. Exiting the open under 2576.00 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…
Wednesday’s one or two rubber band stretches didn’t resolve Wednesday afternoon or through Thursday’s open. Better late than never? Overnight ranging had been expanding its upper-end to test 2620.00, where Thursday’s open was greeted. The open’s resolution was down 10 points, which was recovered only gradually, and didn’t even challenge the 2625.25 bias-up signal. The gradual recovery extended anyway, with its “no-bias trending” probing the 2634.50 bias-up target by 7 points. Correcting into the noon hour stopped short of  retracing the morning’s 2625.25 bias-up signal before rallying again to 2659.50. The final hour’s proxy window started reversing down, extending through the close’s dip back into the noon hour’s consolidation at 2634.50. The afternoon’s rally was also no-bias trending, but only the morning’s 2625.25 bias-up signal is “unfinished business below” that still requires being retraced.

Overnight action’s new info…
Relatively narrow, choppy ranging persisted through midnight, repeatedly holding 2641.00, several ticks under Friday’s cash session close. At least bottoms had been rising, but then a drop into Europe’s opens attacked the earlier overnight lows down to 2632.00. Its gradual recovery peaked at the range’s midpoint before resolving down more steeply to fresh overnight lows attacking 2628.00.

If, then…
Friday’s final hour reversal hasn’t been retraced, let alone reversed, but neither has it extended under a prior low. Specifically, the 2627.00-2629.00 prior lows that contained the morning bias environment exit, the noon hour, and the noon hour exit. Traction gained by the afternoon rally is meanwhile intact, and not yet breaking lower through the open would make the morning likelier to bounce. Extending Friday’s bounce is possible, but not at all assured. Similarly, breaking under the overnight range after already coming within 60-90 minutes of the open could be only a rubber band stretch that snaps back up — especially if that initial stretch were to touch the 2625.25 attraction below. Otherwise, maintaining a break lower would target a retest of the prior Friday’s 2585.00 low.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2631.25 would be likely to trigger the 2635.25 bias-down signal at 10:15. Exiting the open above 2642.25 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…
Wednesday’s intraday action didn’t deviate far from the choppy overnight action preceding it. Not far above it, nor below it. The ranging was wide wide enough to represent divergent opinions, by attempts to trend in either direction. But the trending attempts were contained within the range. A late break lower from the afternoon’s narrow range was recovered like the morning’s false break lower. Both recoveries also stopped short of reversing into breaks higher.

Overnight action’s new info…
Not for lack of trying — albeit the attempts haven’t been very powerful — but yesterday’s range remains intact. Flat-to-lower ranging initially drifted down to test and retest 2601.50 through midnight. That’s still several points above yesterday’s lows. Then rallying into and out of Europe’s opens has extended to fresh overnight highs at 2620.00. And that’s still under yesterday’s highs.

If, then…
Potentially, yesterday’s two failed dips are pessimism that will prove bullish from a contrarian perspective. The other basic ingredients are there: weekend illiquidity fast-approaching, recent drop already discounted a lot of negatives, relevant support holding tests. But there’s not an indefinite time allowed before exploiting the setup. Rallying would have been acceptable already Wednesday afternoon. Not yet rallying early Thursday could be because the decline has already resumed into the long weekend. Or, worse, not trending early at all is still vulnerable to remaining range bound. Meanwhile, despite having all of the potentially bullish ingredients, there is a degree of difficulty to rallying — so much congestion from yesterday lies just above the close, making bias-up more difficult than usual to trigger.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2620.00 would be unlikely to trigger the 2625.25 bias-up at 10:15. Exiting the open above 2611.00 would be unlikely to trigger the 2597.00 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…
Nothing about Tuesday’s open was bullish, but, wow. Monday’s rally had closed above Friday afternoon’s prior high which put into play a much higher recovery target. Extending higher into Monday’s close retraced Friday morning’s high, too, but was still overlapping it. Extending even higher overnight was already reacting down into Tuesday’s open. And the opening 15 minutes of volatility was exited back at Friday morning’s high. Tests of both bias-up parameters were rejected. All of which is bearish. And only mildly productive, hardly attacking support at Friday afternoon’s high before trying to recover. That premature optimism can be more bearish than the bearish setups, when the bearish setups haven’t yet been fulfilled. It was followed by an extended optimism which avoided triggering bias-down, but fell anyway — and fell sharply enough to invalidate a required retracement. I was suspicious of that late break’s timing, but it was very productive, anyway.

Overnight action’s new info…
I had noted a 2600.00-2614.00 range before the position-squaring window. Closing within it Tuesday would not be predictive either way. The afternoon’s plunge tested it twice down to 2599.00 and 2596.00, then bounced to 2614.00 at the cash session close. Globex initially fluctuated around the close up to 2624.00. Its eventual reaction down into and out of Europe’s opens touched 2600.00. Bouncing is already retesting the range’s upper-end.

If, then…
Exiting the open beyond either end of 2600.00-2614.00 would be likely to trend in that direction. While there’s no assurance that the upcoming holiday weekend’s seasonal bullishness will be influential, its influence doesn’t begin until this afternoon. Which leaves this morning as optimal for extending the decline, if the decline intends to extend. If the decline does extend to close under Friday’s lows, I would be skeptical that a bullish influence was intended.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2625.25 would be likely to trigger the 2621.25 bias-up signal at 10:15. Exiting the open above 2630.75 would be likely also to exceed the 2628.50 bias-up target at 10:15 to renew the bias-up signal, next targeting 2641.50. Exiting the open under 2614.00 would be unlikely to trigger bias-up.