Pre-market Tour

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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’s open was greeted by sideways ranging that never probed Thursday’s test of 2677.00 resistance, but also not rejecting it. Post-open action didn’t probe higher either, never stretching the rubber band. So, a drop to 2658.00 lacked the momentum of a rubber band snapping back. The drop was retraced almost as quickly. The balance of the session copied the overnight pattern and ranged sideways, never probing 2677.00 resistance, but also not rejecting it.

Overnight action’s new info…
A delayed open seemed to have a lot of pent-up buying pressure. Spiking up 9-10 points from Friday’s 2669.00-2671.50 close was retraced quickly. Then it was recovered gradually. And extended, for awhile. Attacking 2681.00 was later improved to 2682.25, and its reaction down is attacking the 2677.50 interim low.

If, then…
Without rejecting the ongoing test of 2677.00 on a timely basis, fresh highs became more possible. Now they’re being tested, above 2681.00 and not quite attacking 2684.25. Fresh highs are still vulnerable to reversing down, albeit a little less so, and probably not if maintained much past noon. Extending higher would target 2693.00 and 2703.00.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2681.00 would be likely to trigger the 2678.25 bias-up signal at 10:15. Exiting the open under 2674.00 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…
Thursday extended Wednesday’s rally with the help of an early start after Wednesday’s close. Its push up to 2655.00 into the Globex open was corrected overnight and recovered into Thursday’s open. A shallower post-open dip was quickly recovered to resume the rally. Its potential up to 2677.00 was exploited almost entirely at the afternoon’s late high, gaining traction for its effort. The final hour’s dip met and held its 2664.00 target before firming 2-3 points into the cash session close. Futures retraced the rest on the way to 2677.50.

Overnight action’s new info…
The catalyst for recovering from Thursday’s late dip was AMZN earnings. AMZN soared to new highs, but S&Ps pulled back to test and retest 2666.00, resisted by 2672.00 above — the upper-end is being retested now. The hot-and-cold relationship shouldn’t be surprising. The period before individual equity earnings events are mostly inhibiting to the broader market, which the late pullback expressed. The dip rid the market of weak longs and trapped shorts, while injecting a bit of contrarian pessimism. The period before individual equity earnings events are rarely influential to the broader market, which the overnight range has expressed.

If, then…
Probing fresh highs this morning was already likely when yesterday’s final hour was entered above its bias environment highs. That completed a setup, indicating that the rally had gained traction for its efforts. Holding the late dip to its 2664.00 target helped by correcting the rally. The intraday rally had stopped short of its 2677.00 potential, which also helped. The post-close surge that fulfilled the potential was too late to matter. Unless the open fails to hold a retest of 2664.00, and triggers bias-down. Otherwise, slightly higher fresh highs remain likely this morning. And fresh highs this morning remain vulnerable to being reversed down through the afternoon. Until reversing down, fresh highs this morning would be vulnerable to extending higher into the weekend, next targeting 2693.00 and 2703.00.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2664.00 would be unlikely to trigger the 2661.50 bias-down signal at 10:15. Exiting the open above 2777.00 would be likely to trigger the 2671.25 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…
Tuesday’s choppy overnight range had tried at first to extend the afternoon’s bounce to 2640.00, only to eventually try defending against extending Tuesday morning’s plunge to 2616.00. Wednesday’s flat open at 2632.00 did initially plunge to probe fresh lows at 2611.00, but that action was isolated to the opening 15 minutes of volatility. The balance of the session trended up, including a midday flat-to-higher range resisted by 2636.00. A late surge to 2644.00 was retraced 14 points and then recovered ahead of Facebook’s earnings.

Overnight action’s new info…
Favorable reaction to FB earnings extended Wednesday’s late recovery to attack 2655.00. A narrow consolidation there broke lower through midnight, testing 2640.00 into Europe’s opens. Stopping 1 point short of yesterday’s cash session close was enough to launch a bounce back into the earlier consolidation up to 2652.00.

If, then…
A basic poker betting strategy is called the “Continuation bet,” or c-bet. It refers to the lead bettor of the first round leading out on the second round, regardless of whether his hand improved. It’s often a bluff, but the c-bet shakes out weaker hands anyway. Similarly in markets, one session’s trending tends to extend into the following day, a c-bet regardless of it being momentum or actual accumulation. Overnight action has held up yesterday’s late surge, although we already know yesterday’s low doesn’t qualify as a completed bottom. Its initial follow-through was brief, and its eventual retracement was shallow, both of which are indications of excessive optimism. If maintained through Thursday’s open, then a morning rally would get every benefit of the doubt. But another round of betting precedes the open, and it is a reliable catalyst for volatility — the ECB policy statement and Mario Draghi press conference.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2650.50 would be likely to trigger the 2645.75 bias-up signal at 10:15. Exiting the open under 2640.75 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 2681.00 gap up was under the 2688.50 overnight highs that had probed above prior highs. The rejection kept alive a string of “ineffectual optimism” that had defined price action since Friday afternoon’s 2659.75 low. That was largely retraced during Tuesday morning’s drop, but the afternoon plunged to 2616.00 during the bias environment. The low filled a two-week old gap that held, leaving a choppy afternoon that closed at 2634.00-2635.00.

Overnight action’s new info…
Tuesday afternoon’s bounce initially firmed to attack 2640.00. That lack of upside commitment was eventually exploited by a single one-hour drop to 2626.00 well before midnight. Europe’s opens triggered a surge to 2637.00, which was retraced as quickly as it had developed. Retraced and reversed to fresh overnight lows. A dip attacking 2618.00 is now trying to recover 2624.00.

If, then…
The gap filled by Tuesday’s low had formed by stopping optimistically short of fully bottoming before launching a rally — the rally that has now been fully retraced. Tuesday’s bounce stopped short of recovering “higher prior lows” that would have signaled the gap held. And overnight action hasn’t extended Tuesday’s bounce. So, regardless of yesterday afternoon’s bounce having stalled the decline, Wednesday is being greeted by the ongoing test of a tenuous gap. Potential for another corrective bounce this morning probably diminishes greatly if not already underway coming out of the open, targeting the gap back up to Tuesday’s close. Trying to resume the decline would find more dominoes ready to fall.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2621.25 would be likely to trigger the 2624.25 bias-down signal at 10:15. Exiting the open above 2634.00 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…
Monday’s higher open at 2677.00 reacted down a couple of times into negative territory under 2668.00, but didn’t extend. A bigger bounce attacking 2683.00 only stretched the rubber band, and snapping back down eventually probed fresh session lows attacking 2657.00 — filling the week-old gap where Friday’s 2660.00 low had stopped optimistically short. The final hour bounced to unchanged at 2670.00-2671.00. No unfinished business was left outstanding above or below.

Overnight action’s new info…
Yesterday’s late bounce has extended higher relentlessly. First gradually, and eventually a little steeper up to 2688.00. That is 5 points above Sunday and Monday’s highs, probing further into “higher prior lows.”

If, then…
Repeated instances of “ineffectual optimism” began with Friday’s late bounce that had stopped short of support. Its minimum consequence was fulfilled yesterday by afternoon’s lower low, which held a test of support. Several other instances of ineffectual optimism developed before the test, suggesting the test would ultimately fail to hold. Really? The rally since is indicating a gap up above that entire range. Obviously, maintaining a gap up above resistance would contradict the objective of breaking under support. The question is whether the gap up is maintained, or if a gap up is even still indicated at the open. Maintaining a gap up would get every benefit of the doubt for extending higher. Rejecting the gap up anyway would be that much more bearish.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2680.25 would at least be likely to trigger the 2675.50 bias-up signal at 10:15. Exiting the open above 2687.75 would be likely also to exceed the 2683.00 bias-up target at 10:15 to renew the bias-up signal.