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…
Closing Friday above 2758.00 and 2770.00 had put into play the next higher targets at 2813.00 and 2830.00-2833.00. A last opportunity to reject that premise was to immediately reject the higher close. Sunday night probed Friday’s late 2792.00 high up to 2805.50 which Monday’s open attacked up to 2802.25. That fulfilled the morning’s bias-up target, and the balance of the session ranged flat-to-lower, twice testing 2784.00 as support. The morning’s 2793.50 bias-up signal defined the afternoon’s upper-end. A late 13-point surge to 2797.00 exited the position-squaring window falling back into the range at 2787.50, a 61.8% retracement of the afternoon’s range — natural support.

Overnight action’s new info…
Narrow ranging around 2787.50 ended before midnight and has since rallied steadily. Two hours of consolidating at the overnight highs has formed an Ascending Triangle. Hovering pessimistically short of yesterday’s late 2797.00 high is threatening to open back above Friday’s highs.

If, then…
Monday’s NQ closed higher, ES closed flat, and YM closed lower, leveraging Friday’s similar relationship to confirm a bullish context. Yesterday morning’s drop developed during a bias-up environment, its sellers being weak-handed because the context precluded them from gaining traction for their effort. Quickly recovering or opening back above Friday’s 2792.00 high and yesterday afternoon’s 2793.50 highs should help to crystallize this morning’s focus on extending the rally. Any early indication of NOT recovering through the open would be more vulnerable to extending yesterday’s pullback with room down to 2770.00.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2797.25 would be likely to trigger the 2794.75 bias-up signal at 10:15. Exiting the open under 2791.50 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…
Fluctuating choppily 6-points either way around unchanged had attacked 2750.00 above, and tested 2739.00 below. Friday’s pre-open Employment Situation report was ultimately greeted by a 10-point dip to 2735.50. But it was only last-minute pessimism, which disappeared into a 28-point surge to 2864.00. That fulfilled the next higher objective at 2858.00, and 2870.00 was fulfilled when the rally resumed post-open and added 11 points through the morning. Another 11 points higher through the afternoon was resisted by 2786.00, before surging to 2892.00 into the close.

Overnight action’s new info…
Friday’s last-minute surge had been retraced 3-4 points into the weekend. Sunday night’s open abruptly reversed that by surging 10 points to 2798.50. The surge’s end became a relatively narrow flat-to-higher range supported by this morning’s 2793.50 bias-up signal. The range had broken higher to greet Europe’s opens at 2805.00, which abruptly collapsed 9 points back into a narrow range around 2798.50… Meanwhile, Bitcoin is trying to fulfill the bullish setup we discussed at Friday’s close. Consequently, it is defining a nearby sell signal that must be avoided in the near-term to avoid being cut in half.

If, then…
Last week’s bearish template rested Friday, which Friday’s surge exploited well. Overnight action resembles the behavior, but that doesn’t yet mean its next stage has arrived. Similarly, hovering above Friday’s highs doesn’t yet mean a decline won’t greet the open. But avoiding that late selling pressure — or limiting it — would help to confirm the next higher objectives are in-play at 2818.00 and 2830.00-2833.00.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2787.75 would be unlikely to trigger the 2793.50 bias-up signal at 10:15. Exiting the open above 2797.00 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…
This week’s burning question was whether the corrective bounce from last Friday was ending. Holding multiple tests of its 2730.25-2732.75 (basis Jun, 2725.25-2727.75 basis Mar) limit was one factor. Another factor was daily comportment with the bearish distributive template. Thursday morning’s probes of fresh highs repeatedly failed, as did an afternoon surge to fresh highs. The President’s press conference left no time for resolving the pattern before the close, which attacked the afternoon high.

Overnight action’s new info…
Choppiness throughout the night has probed 5 points higher, 5 points lower, and is currently unchanged from yesterday’s close. Initially, two separate probes of fresh highs attacked 2748.00 and then 2750.00 (basis Jun), retracing entirely in the interim. The second retracement turned negative for awhile, testing 2739.00 before midnight. Flat-to-higher ranging since then is now trying to probe back into positive territory.

If, then…
[All price references are now basis Jun, which is the front-month, trading at a 5-point premium to Mar]… Despite probing higher highs, the distributive behavior continues. At least, earlier last night, when two probes of fresh highs were more than fully retraced. This behavior can repeat into higher and higher highs — specifically 2758.00 or 2770.00 — before the rally from last Friday can start being considered something more substantial than a temporary correction. Meanwhile, the distributive behavior need not repeat at all before the correction ends, perhaps by already exiting the open under last night’s initial ~2741.50 lows. So, the higher objective(s) will probably be in-play, possibly for today, if the Employment Situation report reaction hasn’t yet affected the market bearishly through the open.

First Trade…
[Click here to view the Bias parameters] Preliminary levels aren’t applied ahead of an Employment Situation report.

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 reaction to Gary Cohn’s resignation had gapped down 24 points from the 2724.00 cash session close to 2700.00, then extended down to 2681.00. Wednesday’s open was greeted back at 2700.00, which then recovered to attack 2724.00 to within 1 tick. The open’s gap down was retested into the noon hour, and holding its test was rewarded by recovering to within 1 tick of Tuesday afternoon’s 2730.50 high — which was done by invalidating the afternoon’s clean bias-down signal at 1:30. Last-minute weakness finished a third consecutive session at or near the 2725.25-2727.75 corrective bounce limit.

Overnight action’s new info…
Wednesday’s last-minute weakness drifted only a little lower to 2720.00 before bouncing back to 2727.75. Choppy ranging persisted into and out of Europe’s opens, forming a chart that resembles a shark’s menacing dorsal fin protruding above the water. [Cue the Jaws theme music.] The most recent reversal back into the range has extended through its upper-end, now probing Tuesday and Wednesday afternoon’s highs up to 2733.50.

If, then…
Retesting Tuesday afternoon’s highs was a likely reward for having absorbed Wednesday’s second dip back to the open. The recovery wasn’t rejected through the close, and another test of the corrective bounce limit was held. So, the bearish template is — again — either to reject probes of fresh highs before reversing down sharply, or else to already be collapsing through the open. The latter may seem unlikely now while fresh highs are being probed, but the ECB announcement and Draghi’s press conference are just minutes away. Regardless, extending higher or trending down substantially will be difficult on the day before Friday’s pre-open Employment Situation report. Nevertheless, extending fresh highs Thursday morning would start making fresh highs at 2753.00 or 2765.00 likelier next.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2733.25 would be likely to trigger the 2731.00 bias-up signal at 10:15. Exiting the open under 2727.75 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’s bearish template developed fully, with one exception — the bearish resolution. Having held a test Monday of the corrective bounce’s 2725.25-2727.75 objective, a failed intraday probe above it (i.e. distribution) was needed to kick-start the reversal. The probe happened up to 2734.50 before the open, and the reversal was underway down to 2710.25 during the bias environment exit. But a knee-jerk reaction to a tariffs headline triggered a recovery that ranged sideways around 2725.25-2727.75 through the close. Unfinished business below was left outstanding at the morning’s 2704.75 bias-down signal.

Overnight action’s new info…
Who knew. Apparently, the White House Chief Economic Advisor is critical to market stability. At least, that’s implied by Tuesday night’s 24-27 point gap down to 2700.00 in reaction to Gary Cohn’s resignation. And that eventually extended down to 2681.25. The test of “lower prior highs” at 2683.00 from last Friday afternoon reacted up until touching 2704.75, Tuesday morning’s unfinished business that is now neutralized. A shallower dip to 2685.00 was recovered almost entirely to 2704.75 through Europe’s opens. A 10-point range that formed since then just blipped-up to the 2707.00 bias-down target’s resistance, and reacted back down into the range.

If, then…
Knee-jerk reactions to news tend to be retraced to their origin, so filling the gap back to Tuesday’s close shouldn’t be surprising. But that’s not a timing mechanism, a requirement or even an influence, so it’s not an impediment to extending down. Meanwhile, there wasn’t any bullish reason last week to revisit 2701.00 or 2682.00, so the alternative to not holding their tests today could be to trend sharply lower. The immediate question isn’t about resolution, but the path there. The intraday crowd hasn’t yet had the opportunity to react to last night’s news. Another corrective bounce into or through the open up to 2713.25 or 2718.75 should still be shallow enough to attract sellers, but any higher could inhibit them to think the storm has passed. Otherwise, not holding the 2695.00 area through the open would mean strong hands aren’t waiting for more strength to sell into.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2718.75 would be unlikely to trigger the 2717.00 bias-down signal at 10:15. Exiting the open under 2713.25 would be likely to trigger bias-down. Exiting the open under 2704.75 would be likely also to exceed the 2707.00 bias-down signal at 10:15 to renew the bias-down signal.