The First Trade… Big shoes to fill.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Tuesday’s opening 15 minutes of volatility elapsed entirely under Monday’s 2022.00-2023.00 lows. That’s an unstable base to launch a rally, and the bias environment exit didn’t recover the 2027.00 prior high. Yellen’s dovish remarks nevertheless triggered a surge back to Sunday night’s 2039.75 high. And that extended back to last week’s 2047.50 high.
Overnight action’s new info…
Extending even higher soon tested the next higher objective at 2051.00. A pullback to 2047.50 had been recovered into Europe’s opens, extending quickly up to 2058.25. Consolidating there for a couple of hours then broke higher again, testing 2061.50 before reacting down 3 points.
If, then…
The whole point to last week’s pullback was to correct the rally — specifically, its break above February’s highs — before resuming the rally to probe last year’s highs. The correction’s minimum objective was barely attacked to within 3 points Thursday at 2012.25. Its likelier objective at 1980.00 wasn’t even threatened. Yet, already new highs are printing for this year. That impatience left behind yesterday’s opening dip without actually absorbing or rejecting it, let alone retesting Thursday’s opening gap. Regardless of the sudden recovery’s degree, it’s still fresh, and still vulnerable. Its next higher objectives at 2051.00 and 2056.00 are also this morning’s bias-up signal and target, and their renewed bias-up target at 2061.25 is being tested. After expending a lot of impatient buying pressure overnight, what little traction was gained by yesterday afternoon’s buyers is at risk of inverting down. If 2061.25‘s test isn’t the start of this leg’s end, then doubly-renewing the bias-up would target 2067.00-2068.00.
First Trade…
Exiting the open at 9:45 under 2054.00 would be unlikely also to exceed the 2056.00 bias-up target or to renew the bias-up signal. Exiting the open above 2059.25 would be likely to renew the bias-up.