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…
Friday afternoon’s rally averted disaster. Overnight action had been hopeful, as was the opening 15 minutes of flat-to-higher ranging up to 2618.50. Then a reversal down developed, at first gradual, at times steep, and eventually deep. And relentless, trending down into the afternoon’s bias environment low, which attacked Monday night’s 2529.00 low to within 5 ticks. Sitting on the precipice ahead of the week’s least liquid window, price began reversing up. Initially triggered by the fresh low having been only a blip-down, the bias environment became a massive upleg. A less massive correction resolved into another still massive upleg probing the morning’s high by more than 19 points to attack 2638.00. Its reaction down still had time to close back at the morning’s 2618.50 high.

Overnight action’s new info…
Gradually firming back to Friday’s late high pierced it  up to 2640.00. Ranging narrowly around Friday’s high eventually tried breaking lower at Europe’s opens. Its blip-down was retraced into the narrow range, which soon surged 12 points and then another 8 to touch 2655.00. The second surge and some of the first are now being retraced down to 2643.75.

If, then…
Throughout last week I chronicled the ongoing markers of a coming capitulation. Those were the individual sets of two distributive actions, which were characterized as relatively deeper downlegs and more greatly rejected recoveries. Friday morning’s 90-point drop to new intraday lows qualifies as capitulation, regardless of recovering it entirely through the afternoon. This is also regardless of that being the week’s least liquid window, which is still being exploited Sunday night — all eerily similar the two-week old strong Friday afternoon that was followed by new highs Sunday night. The current Friday afternoon and Sunday night rallies are increasingly productive, but their second legs are narrowing. Little of which mattered so much until now, as the overnight high challenges the decline’s last relative highs from Thursday afternoon. The outcome to negotiating their resistance could dictate the next direction into tomorrow morning.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2645.50 would be likely to exceed the 2642.50 bias-up signal through 10:15 to renew the bias-up signal. Exiting the open above 2636.00 would be likely at least to trigger the 2625.75 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…
Flat-to-higher ranging off of Wednesday night’s 2645.50 low had reached 2686.00, and started retracing 6-9 points 15 minutes before the Thursday’s open. That more than doubled during the next 15 minutes. A choppy open finally broke lower to fulfill the 2651.00 bias-down target, and the noon hour extended down to 2613.00. the afternoon bias environment’s bounce tested 2645.50 before returning to the noon hour’s low, and the position-squaring window broke sharply lower to 2577.00. The Dow printed a closing loss of at least 1,000 points.

Overnight action’s new info…
Several swings of higher highs and higher lows developed into Europe’s opens. Each leg measured a measly 25 points, give or take, reaching 2617.00 to net a 44-point gain from yesterday’s last-minute low. Europe’s exchanges fell as they played catch-up (or catch-down, as the case may be) with yesterday afternoon’s portion of the plunge. Hovering at the high tried ignoring that for several hours, but recently broke lower about 25 points to 2593.00. Its reaction up to 2607.50 peaked upon testing uptrending support that had defined the series of higher lows. That has now resolved down to fresh overnight lows, within 4 points of yesterday’s last-minute low.

If, then…
A couple thousand points here and a couple thousand points there, eventually we’re talking about a significant move… When I say the market is vulnerable to collapsing into the weekend, I mean that in relative terms. Relative to the two-week old drop. I’ve been describing this week’s multiple two-day setups of expanded selling pressures — beginning last Friday, and becoming more frequent yesterday. Gapping up sufficiently can invalidate the setup’s near-term influence. Either way, Friday Factors are likely to exacerbate a move as the weekend’s illiquidity gets exponentially closer each minute. The potential for collapse is also suggested by the comparison among the three major indexes/averages, which I describe in today’s recording. Gapping up would still need to maintain and extend to prevent another downdraft before the close.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2615.25 would be likely to trigger the 2609.00 bias-up signal at 10:15. Exiting the open under 2598.75 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 Market Tour <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close…
Wednesday morning’s 40-point rally from 2687 both triggered and fulfilled its 2707 and 2722 bias-up parameters up to 2727. And it was almost all retraced through the noon hour. The opening print was ultimately touched upon e\Exiting the afternoon bias environment’s wide 20-point range. Rather than break lower to form a Wreversal Wednesday, yet another bounce probed the upper-end of the afternoon’s wide range up to 2710. The 3:37 position-squaring window started retracing the last bounce, no differently than the choppy afternoon’s two prior bounces. The 2687 open was being attacked to within a point 3 minutes of the cash session close. Those next 3 minutes continued dropping at the same steep pace down to 2679, which extended to 2667 into the futures settlement. That first probe under the opening print was 20 points under it.

Overnight action’s new info…
The late drop had not slowed its pace through Wednesday’s closes. The pace barely slowed as the drop extended through the Globex open, eventually touching Monday’s 2645.50 cash session close equivalent. Its relevance persisted as its support has served as the overnight low. Rallying through Europe’s opens touched yesterday’s 2679 cash session close equivalent before reversing back down to 2657.

If, then…
The most bullish element is the very late origin of Wednesday’s last downleg, so its sponsorship may be weak-handed and more easily rejected. This is further suggested, not actually signaled, by already retracing the post-close and overnight follow-through back up to yesterday’s cash session close. But it’s not enough for a reversal signal to only retrace the last relevant level, which is yesterday’s cash session close equivalent. That may just be noise. The prior relevant level must also be recovered to indicate stronger-handed sponsorship, which this morning is at least the bias-up signal. Meanwhile, the most bearish element is that two consecutive sessions have probed back above December’s prior highs intraday but failed to close higher — to an increasing degree, both in probing above and rejecting below. The same principle applied to Tuesday’s bottoming pattern, which followed the expanding weakness through Friday and Monday. Similar to that setup, not gapping up above yesterday’s lows to try isolating the overnight drop would be vulnerable to extending the drop. And the next lower objective would be a retest of Monday night’s low down to 2509-2511.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2679 would be unlikely to trigger the 2674 bias-down signal at 10:15. Exiting the open under 2665 would be likely 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…
Monday’s record intraday drop had extended sharply lower through the close, and much more sharply into midnight. Rallying 113 points through Europe’s opens had retraced it all to within 2 points of Monday’s cash session closing equivalent. A pullback consolidated into Tuesday’s open, which surged 100 points and probed positive territory. Another pullback consolidated into Tuesday’s bias environment exit, which surged 75 points to probe fresh highs… Just a normal Tuesday resolution of an expanding Friday-Monday setup, which we had discussed at Monday’s close. Two exceptions: First, the gargantuan size of each leg. Second, the pattern’s stages were accelerated into earlier timing windows. So, the “scary” morning developed fully overnight, and the short-squeeze came early.

Overnight action’s new info…
A narrow (relatively) 15-point range initially hovered above Tuesday morning’s high. By midnight it had slipped into another narrow (relatively) 15-point range hovering just under Tuesday morning’s high. That “second shoe to drop” feeling has lingered despite a steady stream of supportive, bullish comments coming from investment houses and central bankers. Perhaps the anxiousness is now ending as price is creeping back up into the initial range.

If, then…
Notice that I’m adapting the bottoming pattern for Monday night’s plunge to serve as the template’s “scary” morning. So, the pattern’s short-squeeze resolution is done, right? Maybe. Maybe overdone. Both Tuesday’s open AND its close surged. And the second surge originated too late to gain traction for its effort. All of which would be moot by now had last night rallied through Europe’s opens to indicate gapping up, preferably above 2715-2731. That 2715-2731 range is otherwise resistance, at least likely to be tested if the open can maintain a surge or gap up above yesterday’s last-minute 2700 high. Still ranging narrowly into the open would be vulnerable to trending sharply out of the open, in whichever direction. If down, or if opening strength were to falter, then a pullback has room to test Monday’s 2645.50 cash session close equivalent before threatening to probe under Tuesday’s lows.,, BITCOIN, ETC. Near-term resistance at 7850 is being probed by $500, just over 24 hours since probing our long-standing 6100 target by $200 (u.e. 5900-8300). RSIs are diverging negatively into the resistance test while volume slows. This leg seems close to done, potentially one more false break to fresh highs, before a likely pullback to test “lower prior highs” at 7750.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2686.25 would be unlikely to trigger the 2682.50 bias-down signal at 10:15. Exiting the open under 2673.25 would be likely 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…
Monday morning’s gap down and follow-through from Friday’s 2822.00  close only pierced the pre-open low. Both of those lows had otherwise stopped optimistically short of  touching the earlier 2733.00 overnight low. But simply trading in negative territory post-open had put into play a test of at least 2722.00. A substantial bounce was possible first, and in fact, the morning bounced 30 points. But not a durable bounce, as fresh lows were probed during the noon hour. The afternoon plunged almost another hundred points down to 2635.50. There was still time for a 60-point bounce to retrace almost entirely down to 2645.50 at the cash session close. Futures settled more than 43 points lower at 2602.00.

Overnight action’s new info…
Extending down 43 points after the cash session close into the futures settlement might seem like a lot. “Hold my beer,” said Globex. Another plunge down to 2529.00 subtracted another 116 points by midnight. Already rallying sharply into Europe’s opens then extended to within 2 points of yesterday’s 2645.50 cash session close equivalent. Its 30-point reaction down to 2573.00 is now bouncing.

If, then…
The plateau at December’s 2688.00 “lower prior highs” was probed from above and broken through that same session’s close. This requires so much selling pressure that it is highly unusual. The next lower prior highs is from early November at 2583.00. It was probed overnight by at least 50 points, but recovering to close above it today would still indicate a low is forming. Which conforms to the timing pattern created by Monday’s expanded follow-through, for a lower low Tuesday to launch a multi-session rally. The overnight lows don’t require being retested first, but the earlier drop could soften the damage a post-open drop might do, having room down to 2509.00 while still being able to recover (if tested early enough). Typically during a multi-session decline’s Tuesday, not already trying to rally into the noon hour isn’t helpful to bottoming… P. S. Bitcoin hit my $6100 target last night, probing it briefly by about $200 around midnight, so I have begun re-buying several cryptocurrencies.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2599.00 would be unlikely to recover the 2621.00 bias-down target by 10:15 to avoid renewing the bias-down signal. Exiting the open under 2627.00 would be likely at least to trigger the 2638.00 bias-down signal.

Phonetic dictation…
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