The First Trade… It’s beginning to look a lot like Christmas.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK <<==click here
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Plunging about 20 points to 1893.50 at Sunday night’s open had recovered enough to gap up Monday and touch 1929.00. Selling resumed immediately, extending down through the noon hour. The slide ended abruptly after the noon hour upon only barely piercing the overnight low by 1 point. The noon hour’s 1905.50 low was recovered by just enough just in time to prevent sellers from gaining traction. Sellers also failed to gain traction from a steep drop through the 3:10-3:20 timing window that avoided fresh lows. A surge to 1923.00 ended the day unchanged around 1914.00.
Overnight action’s new info…
Monday’s late dip back to unchanged eventually extended down another 14 points to 1899.00. Sympathy for Chinese stocks falling was leveraged by concern for Crude Oil that was probing fresh lows. This morning’s bias-down target happens to be 1899.00, and its reaction extended up to 1912.00 through Europe’s opens. Crude Oil reversed up after a terrorist event in Istanbul triggered a surge that probed yesterday’s opening high to attack 1931.00.
If, then…
Monday afternoon’s low was on the precipice of the precipice. Retesting Sunday night’s low had room below for another 11 points down to 1881.00. The afternoon’s surge’s appearance was very timely, as any lower any later would have pierced an air pocket below. And now another precipice overnight has been recovered from 1899.00 to probe 2 points above Monday morning’s 1929.00 high. It should be noted that Crude Oil is the overnight recovery’s fickle catalyst. Already being oversold from China helped, and from remaining stable through Europe’s opens. While nothing about the pattern suggests it is becoming a durable bottom, sudden pre-expiration detours can have a dizzying effect. Above 1933.50 could extend to 1948.00 or even to 1975.00 — briefly, and temporarily, but steeply — before another downleg can gain traction. Otherwise, stomping immediately Tuesday on overnight optimism could resume the work of Monday morning’s sell-off.
First Trade…
Exiting the open at 9:45 above 1929.00 would be likely also to trigger the 1927.25 bias-up signal at 10:15. Exiting the open under 1921.00 would be unlikely to trigger bias-up.