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…
Wednesday’s gap up above Tuesday afternoon’s ~2831.50 highs extended higher to attack 2840.00. That was 16 points above Tuesday’s close. Bullish? It was still essentially within Tuesday’s range, which was very wide and able to make bounces seem like strength. It was also a return of the ongoing 2-3 week pattern of rejecting early strength early — the setup that had told us last week the rally had become distributive. Its reaction down into the noon hour stopped 1 point short of filling the gap back to Tuesday’s ~2824.00 close. That optimism later proved bearish from a contrarian perspective. The initially favorable knee-jerk reaction to the afternoon’s FOMC policy statement was reversed down hard from 2835.00 to fresh lows at 2813.00. RSIs diverged positively on a retest of 2813.00, launching a late bounce above 2820.00 to trigger a rally with room up to 2830.00. It attacked 2832.00. the close reacted down to 2824-2825.

Overnight action’s new info…
Initially extending up to 2835.00 formed a Symmetrical Triangle that broke higher to 2837.25. The pattern’s breakouts are often false, and reversed more substantially in the opposite direction. As was this one, which retraced the breakout into Europe’s opens, and has since fallen to 2825.00. Which, regardless of the degree and duration of the drop, is back to unchanged from yesterday’s close.

If, then…
I was unavailable for more than annotating the live chart yesterday afternoon. But the market was accommodating enough to fulfill the eventual offsetting test of the morning’s bias-up target down to its 2814.50 bias-down target. The morning’s bias-up signal was never rejected to actually put that into play, although its support was likely to be influential if tested. And its support was influential in producing the late bounce. While that bounce put the market into proximity of gapping up Thursday above 2835.00 to reject the traction gained by yesterday afternoon’s sellers, it also expended valuable buying pressure. Gapping up any shallower — or not gapping up at all, still could probe lower lows down to 2805.00 or 2793.50.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2827.75 would be unlikely to trigger the 2824.00 bias-down signal at 10:15. Exiting the open under 2827.75 would be unlikely to trigger the 2830.00 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…
Tuesday started pessimistically, but didn’t get worse. It may have looked or felt that way since the range is so wide. Gapping down sharply 22 points to 2832.00 immediately probed another 3 points lower. A quick 10-point bounce reacted down 20 points as quickly to 2818.50. All during the first half-hour. The balance of the session ranged choppily sideways, narrowing through the day and closing around 2824.00.

Overnight action’s new info…
Wide, choppy gyrations that characterized intraday action has also defined last night’s ranging. More so, the choppiness expanded instead of contracting, and it has been flat-to-higher. Firming 6 points into the State of the Union speech ultimately surged 6 points afterward to 2835.50. Collapsing 10 points reversed up almost 12 points. And still, yesterday morning’s 2837.00-2839.50 highs have barely been attacked. The last dip to 2828.50 has reacted up to attack 2835.00, about 11 points above yesterday’s close.

If, then…
For all of yesterday’s persistent pessimism, and for all of the overnight choppiness, yesterday’s opening range still stands. Neither end has been touched since then. None of which prevents trending, but it limits the window for starting it. And anything which is limited is implicitly less likely. Having said that, yesterday’s wide opening range does allow reactions within it to be as satisfying as a usual trending leg. Yesterday morning’s highs could be probed into the “empty” space of its gap down (in the Market Tour, I show how to identify the resistance that’s in it). But while this afternoon’s FOMC policy statement is impending, a resolution will likely be inhibited.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2838.50 would likely also exceed the 2837.25 bias-up target at 10:15 to renew the bias-up signal, next targeting 2845.00. Exiting the open above 2831.75 would be likely at least to trigger the 2830.00 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…
Monday’s open immediately signaled the morning’s trend would be down, by opening back under the earlier low of an overnight session that had probed the prior session’s high. Bouncing into resistance at 2871.00 was reversed to test 2855.00. Coinciding with Friday morning’s highs offered support to launch a bounce into the afternoon that tested 2868.00. But it failed to trigger bias-up, and the balance of the session slid again. Testing 2852.00 before the close had time to react back up above the morning’s low.

Overnight action’s new info…
Yesterday’s drop resumed overnight. Flat-to-lower choppiness through the Globex open eventually collapsed sharply to 2831.00 before midnight. That area is also Thursday afternoon’s last relative low, which now serves as support. Already retracing up to what is this morning’s 2845.50 bias-down target — which acts as resistance from below — a narrowing consolidation developed into and out of Europe’s opens.

If, then…
Monday’s very late bounce was probing back above the morning’s low within 3 minutes of the cash session close. So, sellers didn’t gain traction for their efforts. The bounce didn’t recover a prior high, so buyers didn’t gain traction on the bounce. This context for last night’s drop allows it to be briefer before recovering. Briefer, within the other context of yesterday’s opening signal being likely to persist into this morning. Recovering further pre-open would still encounter resistance at 2848.00-2850.50 which must be recovered just to indicate that sellers still aren’t gaining traction for their efforts. Otherwise, the gap back to Thursday’s 2840.00-2841.00 close may be a last line of defense before this downleg becomes something more substantial.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2848.00 would be likely to trigger the 2850.75 bias-down signal at 10:15. Exiting the open under 2841.00 would be likely also not to recover the 2845.50 bias-down target by 10:15 which would 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…
Friday’s gap up extended higher too late to confirm the follow-through was strong-handed. The noon hour’s rally earned a similar, albeit inconsequential, objective. How inconsequential? When I was stepping away from the screens early as the position-squaring window was closing, the 7-point gap up to 2847.00 had extended 21 points. That touched the next higher objective above 2848.00 at 2868.00. Usual and reliable Friday Factors helped — from the persistent morning’s bias, to squeezing the bias environment exit on a trending day. After I left, the rally extended to its room for noise at 2872.25.

Overnight action’s new info…
Extending higher after the cash session close touched 2876.00. And extending that again soon after Sunday night’s open pierced 2874.25. All of which was retraced back down to the rally’s 2872.25 room for noise that was tested into Friday’s close. The natural support back down at unchanged was tested through midnight, but never launched a recovery before giving way through Europe’s opens. Fresh overnight lows at 2864.00 have retraced back down to Friday’s final-hour entry.

If, then…
The new week isn’t being greeted by the familiar optimism. Which could be doubly problematic, since that sentiment was dominant into the weekend. And also out of the weekend, initially. So, triply problematic? How about quadruply problematic: Recall that Friday’s open ignored the two-week pattern of rejecting early strength early. To the degree that was due to the Friday Factors’ impending illiquidity, then how dramatically will the new week compensate for it? Exiting this morning’s opening 15 minutes of volatility at 9:45 under the earlier overnight low around 2873.50 would reject the overnight probe above Friday’s high. All that having been said, the open may very well absorb or retrace its gap down. Even if not, a new trend extreme close on a Friday requires there to be at least another, eventually. And now the initial overnight rally had complexity to qualify as a “new Globex trend extreme” requiring intraday retest, eventually. Leaving them outstanding by an immediate downdraft Monday would be considered only temporary, no matter the reversal’s degree or duration.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2864.50 would be likely also to trigger the 2866.25 bias-down signal at 10:15. Exiting the open above 2870.50 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…
Wednesday night’s rally didn’t only gap up into Thursday’s open. It gapped up into an increasingly bearish pattern of early strength being rejected early. The pattern differed Thursday only in its early surge having come pre-open, a news headline’s knee-jerk reaction up to 2853.75. Regardless of the accelerated timing, it was already snapping back down into the open, which immediately neutralized the “unfinished business above” at Wednesday’s 2848.00 open. The first half-hour’s collapse retested overnight lows down to 2933.75 and bounced again to attack 2848.00. Apparently, that strength was early enough to be rejected down to new lows at 2830.75. So early, that even that drop bounced 9-10 points to close at 2840.00-2841.00, almost flat on the day. But still too late for the late bounce to prevent sellers from gaining traction for their efforts.

Overnight action’s new info…
Thursday’s late bounce had extended through the close, and through the Globex open up to 2847.00 before midnight. Narrow ranging through Europe’s opens finally broke higher to recently test 2852.00. A pullback is now testing what is this morning’s 2849.00 bias-up target as support.

If, then…
Patterns don’t go on forever and repeat endlessly. It’s not uncommon for a series to contain 5, 6, 7 observations of the same behavior. And the 2-week long rally since the last 3-day weekend already contains 4 obvious early rejections of early strength. But a couple of others could qualify. So, I know what your thinking — especially with another gap up indicated this morning… Did this pattern of rejecting early strength early already run its course? Will this gap up be maintained through the open to reject yesterday afternoon’s sellers having gained traction? That could combine quite bullishly with a quasi “session-long rally” setup and Friday morning biases tending to persist through the noon hour. Or, is there at least one more early rejection of early strength left in the chamber? Whether through the open, or after a post-open surge, another ambush by rejection awaits. Well, there’s one way to find out… Okay, maybe two ways. Either extend higher through the open and above any resistance encountered during those first 15 minutes of volatility, or else exit the open trending down and preferably back under 2843.00. Punk (With apologies to Dirty Harry).

PROGRAMMING NOTE: Friday’s Market Wrap will be held at least one hour early.
REMINDER: There is NO Saturday Review this weekend AND next.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above at least 2845.50 would be likely to trigger the 2843.75 bias-up signal at 10:15. Exiting the open above 2851.00 would be likely also to exceed the 2849.00 bias-up target through 10:15 to renew the bias-up signal next targeting fresh highs.