Pre-market Tour

The more reliably profitable strategies for such a low-volume session require patience for the market to probe the range’s extremes. A pre-open formation may have formed a pattern that would point higher through the open. So, I might give that a benefit of the doubt for getting to the range’s upper-extreme. A benefit of the doubt, and a tight trailing stop.

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The overnight rally’s challenge in gapping up to test prior highs or higher prior lows is not to reject their test. That’s been the pattern this week, so we’ll be watching for signs of repeating that pattern, or else rejecting it. Then we’ll see whether there’s still any of that seasonal holiday bullishness available.

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The recovery from 2007.00 probed gradually higher to form a Rising Wedge up to 2021.00. Having been entered aggressively, its exit should be aggressive, too. Which makes early strength credible for extending higher.

Right? Yes, it would have.

But rather than wait for the open, the pattern is already breaking higher pre-open. It just touched 2024.00. Immediate strength still would be credible to extend higher, but now that’s more difficult to do. And back under the 2019.00 area would start pointing down.

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A head & shoulders had formed off of the 2013.75 overnight high down to 2009.00. It has broken lower to its 100% extension at 2006.25, but still has potential to its 2004.50 161.8% and 2001.75 261.8% extensions. But the overnight pattern’s influence can overlap intraday action only through the opening 15 minutes of volatility. And trending up through Friday afternoon’s 2014.25 high could point up for the morning, instead of down.

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We spent a lot of time discussing the potential bullishness of having neutralized the outstanding retest of the Fri-Mon Island’s 2008.00-2014.50 “lower prior highs.” We discussed reversing the two negative stimuli of falling Yen and Crude Oil .

Then the Tour ended while a break higher began testing 2027.00 resistance whose recovery could race higher through the open to isolate yesterday’s post-close selling and suggest a bullish WedEX remains intact. It’s now attacking the quite relevant 2030.00 pullback limit from yesterday.

Or, not… Post-open action won’t have much excuse for delaying extending higher, not unless the pre-open surge is only a head-fake — similar to last night’s Yen ation.

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