Pre-market Tour

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.

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 choppy ranging had developed exclusively in negative territory, back-and-forth within Friday’s late surge, and below it down to 2664.00. Monday’s first hour was less adventuresome, ranging even more narrowly. But at the last possible minute a Dry Cleaners morning signal was avoided by surging back to unchanged at 2690.00, and through it to test the morning’s 2699.00 bias-up signal. Extending higher into and out of the noon hour eventually tested the 2725.25-2727.75 corrective bounce peak described during this weekend’s Saturday Review. The close drifted down to 2717.00.

Overnight action’s new info…
In a throwback to the golden years of two months ago, an unusual 5-point wide range was maintained for hours. Yesterday’s late pullback to 2717.00 held throughout, resolving up to greet Europe’s opens attacking 2727.75. Another 5-point consolidation was resolved more aggressively by surging to 2734.50. Its reaction has dipped back down to 2727.75.

If, then…
Overnight support was apparently a function of last week’s tariffs losing credibility. Overnight gains are apparently a function of a North Korea disarmament talks overture. Whatever the story behind it, this price action is consistent with the bearish scenario of probing yesterday’s highs before failing — whether probing higher this morning and failing this afternoon, or already failing through the open. The bullish scenario departs from the bearish scenario by not rejecting the higher probes. Negotiating the range between yesterday’s close and its highs at 2718.00-2728.00 could be the difference between rallying and reversing.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2725.25 would be unlikely to trigger the 2727.75 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…
Friday’s fresh low was likely for having trended down through each of the three prior sessions. Friday’s potential for trending down into the weekend was likely for similar reasons, and for being a Friday when the weekend’s impending illiquidity can exacerbate sentiment. The early bearish sentiment was contained to testing its 2652.00 bias-down target by 5 points. But the contrary sentiment was limited to returning to unchanged around 2677.00 by noon, and ranging there choppily until exiting the proxy window at 3:20. Surging 25 points to test 2695.00 into the close did not recover any relevant level to reverse the trend up, and its catalyst seemed only to be earlier shorts covering ahead of the weekend.

Overnight action’s new info…
Sunday night’s gap down quickly touched 2677.00 and a couple of points lower, confirming that Friday’s late surge wasn’t necessarily bullish. Bouncing nearly filled the gap back to Friday’s 2690.00 close before reversing into a slide that eventually tested 2664.00. The slide not only ended at Europe’s opens, but also began reversing back up, briefly probing Friday’s close to almost 2692.00. the past hour has drifted back down 13 points.

If, then…
Immediately retracing Friday’s late surge last night does help to prove it wasn’t bullish. But having retraced it, resuming the recovery can suggest new sponsorship has arrived, after all. Resuming the rally by triggering bias-up, preferably by already exceeding Friday’s late high through the open. Rejecting a probe above Friday’s late high through the open would keep the door wide open to trending back down today.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2685.00 would be unlikely to trigger the 2674.00 bias-down signal at 10:15 — at least, not without first touching the 2699.00 bias-up signal. Exiting the open under 2685.00 would be unlikely to trigger the 2699.00 bias-up signal at 10:15.