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…
Thursday’s decline wasn’t immediate. At least, its immediate attempt at declining was recovered to probe fresh session highs in positive territory. But the morning bias environment resumed the decline, which extended relentlessly through the afternoon. The foregoing actually describes Tuesday and Wednesday, too. But Thursday was the first to revisit the prior week’s lows, which had held a test of 2701.50, and which there was no bullish reason to revisit. Last Wednesday night’s 2682.00 low of that original test was revisited, too. The afternoon bias environment’s 2758.50 low was retraced by a late bounce up to 2689.00, ending the day at 2776.00-2778.00.

Overnight action’s new info…
Initially firming attacked 2685.00 before reacting back down to 2669.00. Europe’s opens didn’t fall apart, and 2685.00 was attacked again. It also reacted back down again, but more substantially to within tick of yesterday’s 2658.50 low. A couple of bounces individually and thoroughly tested what is this morning’s 2666.00 bias-down signal’s resistance. Resistance won, producing a probe under yesterday’s low by at least 1 point.

If, then…
After three consecutive sessions of trending down sharply, today’s session is shaping up to be just another day. Which doesn’t necessarily mean a fourth consecutive session of trending down sharply. But two days of impending illiquidity is introducing Friday Factors into the equation. So today’s fourth session should either trend down sharply on steroids, or else reverse up sharply at some point. The 3-week old low is an example of the latter, which reversed up sharply from a very late test of a prior low. The nearest similar support under yesterday’s lows isn’t encountered until 2634.00 and more likely 2620.00. And another late Friday save that reverses up sharply is always the least likely resolution. Let’s assume Pavlov’s work is complete, and no early bounce develops today — which we’ll assume so long as positive territory is avoided or rejected within minutes. Trending down sharply can meet one or both of those levels without reversing up, and still leave some steroids for Sunday night and Monday to continue tracking the 1987-style crash template.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2673.25 would be unlikely to trigger the 2666.00 bias-down signal at 10:15. Exiting the open under 2663.50 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…
Ranging sideways overnight had briefly probed under Tuesday’s intraday lows, but Wednesday’s open gapped up. The gap up was immediately retraced, but not enough to probe back under Tuesday’s lows, forming the basis of an Isolation setup. The bias-up signal triggered, too, after already having come within 2 points of its target. Both setups were invalidated — by probing back under Tuesday’s lows and by exiting the bias environment under its bias-down signal, respectively. Neither rejection equated to a sell signal, but an afternoon recovery back into positive territory ended when the bias environment began lapsing. The balance of the session plunged 47 points to retrace almost all of the past week’s rally.

Overnight action’s new info…
The late intraday plunge to 2712.00 was initially consolidated back up to 2722.50. Another smaller collapse suddenly fell to 2703.00, which began another consolidation through midnight. A hopeful rally back to the earlier highs greeted Europe’s opens. But hovering there narrowly for another hour wasn’t hopeful enough to avoid sliding back down to the overnight lows. And now lower, having just touched this morning’s 2698.25 bias-down target, where last Wednesday afternoon’s plunge had closed.

If, then…
For all of the recent selling, a new downleg hasn’t yet been triggered. There certainly are reasons to suspect that sellers are stronger-handed. Such as, rejecting the bias-up three times in two days, which is distributive but not a trigger. Retesting the original pullback’s 2701.50 limit — whose test last week had reacted up into Tuesday morning’s high — isn’t necessarily bullish, but it’s not bearish without closing below it. And now the same can be said of a recovery. While yesterday’s renewed selling may be no more than pessimism ahead of Fed chair Powell’s Senate testimony today, a relief rally after he appears won’t be enough to suggest the recent low’s retest has held. The only early reliable setup from the overnight pattern would require the open to probe above its 2722.50 high. Anything shallower will remain vulnerable to probing lower intraday, regardless of its resolution.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2701.50 would be likely to trigger the 2707.50 bias-down 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…
Tuesday’s drop was not immediate, but its delay was brief and its resolve was relentless. Monday’s rally can be characterized similarly. Optimism ahead of the new Fed Chair’s first ever congressional testimony had been largely discounted. Tuesday’s outside day finished the discounting early by adding 9-1/2 points above Monday’s cash session high up to 2789.75. Did it also overly-compensate by eventually probing 9-1/2 points under Monday’s low down to 2743.50?

Overnight action’s new info…
That over-compensation shrank before it got wider. And then it shrank again. Firming to 2754.50 was rejected by a dip to fresh lows at 2738.50. Recovering steadily through midnight persisted into and out of Europe’s opens until touching the earlier high. Now its reaction down to 2746.00 has formed an inverted Head & Shoulders pattern.

If, then…
Yesterday’s dip had been consolidating at or above its lowest projected support at 2749.75, until coming to within 3 minutes of the cash session close. A last-minute dip contains the session’s lower lows, which tested “lower prior highs” at 2743.00 through the futures close. Both of these relevant levels have yet to be broken during a relevant intraday timing window. Which would likely extend yesterday’s downtrend through this morning. Otherwise, maintaining an open above yesterday’s lows — then extending it through the open — could form an Isolation pattern to reinstate another multi-session rally. Meanwhile, the overnight Head & Shoulders influence must be obvious during that same initial 15 minutes of volatility to be influential intraday. This is equally true for any overnight pattern’s influence, and a Head & Shoulders pattern’s influence can be bullish or bearish, with specific measurements targeted in either direction. And extending down to the lower targets would be in-line with the 1987-style crash template that’s still tracking.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2753.25 would be unlikely to trigger the 2755.75 bias-up signal at 10:15. Exiting the open under 2740.75 would be likely to trigger the 2744.50 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…
Thursday’s Isolation setup had been confirmed into the weekend, signaling follow-through. Sunday night’s opening surge and Monday’s gap up acted accordingly. The open’s rally got a little ahead of itself by quickly fulfilling the morning’s 2766.50 bias-up target. But a late rejection of the 2757.00 bias-up signal only dipped to 2753.00 before resuming the Isolation setup’s rally. The balance of the session rallied relentlessly up to 2780.00 — fully recovering a last-minute dip to 2774.00 into the cash session close, and then surging another 5-6 points into the Globex open.

Overnight action’s new info…
Yesterday’s last bit of enthusiasm has been retraced, but not yet reversed. Monday’s late surge never extended any higher. It initially consolidated, with errant ticks touching 2787.00. Finally breaking lower briefly touched 2775.50, a 6-point blip-up into Europe’s opens was retraced entirely down to the low. And now lower to attack yesterday’s late 2774.00 low.

If, then…
Was Monday’s optimism immediate, relentless, or excessive? The correct answer is “D”, all of the above. Surging 13 points through yesterday’s close is representative of the entire session’s 32-34 point rally. Its excess wasn’t identified until overnight action retraced the last surge. So, is the overnight retracement beginning to reject yesterday’s optimism, or only correct it? This correct answer here can be only one, or the other. And if the overnight dip is only a correction — whether or not yet complete —  then it is healthy for extending the rally higher today. Extending higher relies first on the market getting what it wants from the new Fed chair’s testimony. That could get tricky, as his 10:00 remarks may not be embargoed past 8:30 and his 10:00 appearance could discover that any positive reaction is already done. And if the remarks don’t give the rally what it wants, then its resumption would likely be detoured further by a deeper dip back down to yesterday’s morning’s “lower prior highs.”

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2771.25 would be likely to trigger the 2774.00 bias-down signal at 10:15. Exiting the open under 2780.00 would be unlikely to trigger the 2781.00 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…
The weekend’s impending illiquidity neither rejected Friday’s gap up to 2718.00, nor caused its rejection. Friday Factors didn’t seem influential at all through the first hour’s 2713.00-2723.00 range, or the morning bias environment’s rally attacking 2730.00 resistance. But Friday Factors were likely to be influential at least once, and their illiquidity was getting exponentially closer every minute while the afternoon bias environment coiled back up to resistance. The balance of the session broke higher almost 20 points to attack 2750.00, 5 points short of the prior Friday’s 2755.00 high. Closing above Thursday’s 2731.00 high alone was enough to confirm its Isolation setup’s reversal remained intact.

Overnight action’s new info…
Sunday night’s open spiked up to attack the prior Friday’s 2755.00 high within 1 point. Adding another 3 ticks reacted down 12 points to test 2743.00. Most of which was recovered by eking higher through midnight. Consolidating into Europe’s opens broke higher again, probing fresh recovery highs up to 2761.50.

If, then…
Completely retracing the prior week’s 2755.00 high was the reward for having contained its pullback to tests of 2701.50. The pullback included Wednesday night’s dip to 2782.00, which was isolated by Thursday’s open back above Wednesday’s lows. Even if the Isolation setup wasn’t confirmed until Friday, its likelihood for multiple sessions of follow-through still gets a benefit of the doubt. Regardless of any confidence in extending the bounce, be mindful that the 1987-style crash pattern’s analog is within days or hours of its final bounce’s peak. No analog is perfect in both its price and time measurements, as we discussed during this weekend’s Saturday Review. Only structure matters. So, the current bounce’s next higher objectives at 2813.00 and 2825.25-2827.75 are in-play on a close above 2857.00, and so long as upside momentum keeps in mind Satchel Paige’s most famous saying: “Don’t look back. Something might be gaining on you.”

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2753.25 would be unlikely to trigger the 2757.00 bias-up signal at 10:15.