The First Trade… Champing at the bit.
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…
Gapping up 14-16 points Thursday would have rejected the ongoing downtrend. Wednesday’s night’s action fully tested that limit up to 2060.00, but greeted Thursday’s open at 2051.00. The morning slid back to unchanged around 2045.00, and the afternoon bias environment began by attacking Wednesday’s 2039.00 low to within 2 ticks. Two bounces testing 2045.00 defined sideways ranging into the close, as Friday’s approaching Employment Situation report inhibited trending.
Overnight action’s new info…
Thursday afternoon’s choppy ranging has essentially persisted, but decline seems eager to get on with it. Bounces still holding tests of the 2045.00 area. But their interim dips have probed momentarily to fresh lows at 2038.00. The latest bounce is being followed by a third drop to 2038.00, yet to recover.
If, then…
The decline has already identified its next objective at 2035.00 or 2030.00. I think the latter more so than the former, if not also lower to a 2027.00 handle. Buyers have ineffectually expended a lot of energy recently. Wednesday afternoon’s bounce had originated from just above 2039.00, where the bounce was retraced. Wednesday night’s bounce (and Thursday’s gap up) expended a lot of energy, too, also ineffectually, as we now know by its complete retracement to fresh lows. The ongoing decline should have little difficulty aggressively exploiting all of that failed buying pressure and chipping away at support, especially with the weekend’s impending illiquidity… If not — if the decline’s overnight eagerness becomes overly-pessimistic — then the likely alternative is a substantial rally.
First Trade…
Exiting the open at 9:45 above 2042.00 would be unlikely to trigger the 2041.00 bias-down signal at 10:15. Exiting the open at 9:45 under 2039.75 would be likely to trigger bias-down. Exiting the open under 2033.00 would be likely to renew the bias-down signal under its 2034.75 bias-down target at 10:15.