The First Trade… Brief respite.

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…
Friday’s open gapped down 16 points to 2157.00, and doubled that into the noon hour’s test of 2140.00. Often, such a Friday morning slide would produce a flat-to-higher afternoon. But the selling resumed more aggressively. The cash session close equated to 2120.50, but futures extended down to 2115.50 and 2113.25. August’s 2134.00 prior low was broken on the way down to prices last seen two months earlier in July.

Overnight action’s new info…
Sunday night’s open blipped up momentarily from Friday’s futures close to touch 2117.00, but that was still 3 points under Friday’s cash session close. The drop soon extended down to 2109.00 to await Asia’s opens, which triggered another drop to fresh lows at 2100.25. Bouncing 8 points was retraced entirely through Europe’s opens. Overnight lows are still being attacked.

If, then…
Gapping down is currently indicated above June’s “lower prior highs” (discussed during this weekend’s Saturday Review). Barely. Its representative price can be reduced to 2095.00-2100.00. Gapping down under it is made a little likelier today because Friday’s open gapped under its lower prior high. Regardless of the opening print, recovering through the open from having probed under it could help to launch a morning bounce.Not reacting to lower prior highs could enable today’s drop to make Friday’s drop seem relatively puny. As a reminder, just closing under 2134.00 would confirm a trend change, requiring at least an eventual third lower close. Lon-entries today should be considered only for brief exposure.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2109.00 would be likely to renew the bias-down signal by not recovering the 2110.75 bias-down target through 10:15. The renewed bias-down target would be 2102.00.