The First Trade… Counter-counterintuitive.

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…
Despite Sunday night surging 10 points to new highs attacking 2265.00, Monday’s open back under Friday’s highs 2254.25 had isolated the new highs to the overnight session. A post-open surge to 2259.00 was retraced in time to somewhat similarly isolate it. After extending down to test 2247.00 during the noon hour, the balance of the session hovered 1 point higher in negative territory.

Overnight action’s new info…
A quick dip back down to Monday afternoon’s 2247.00 lows was recovered back up to the afternoon’s highs. Its resistance began melting away ahead of Europe’s opens, but that’s when it disappeared altogether. Now yesterday’s post-open surge has been retraced to within 1 point at 2258.00.

If, then…
An observation we’ve discussed here for a couple of months is that the market seems very willing to embrace getting past the long-anticipated rate hike. Think in terms of ripping off the band-aid, or meeting future in-laws. I’ve noted this whenever strong economic reports have at least temporarily triggered a price surge that previously would have triggered selling. Well, tomorrow afternoon’s FOMC policy statement brings an opportunity to get the event behind us.
…Regardless of the knee-jerk reaction, pessimism should at some point be expressed by selling. Crouching defensively at some point ahead of the news would be appropriate, too. Yesterday’s dip was too modest to qualify as pessimism. As noted, Monday’s patient pessimism and ineffectual optimism were only potentially bearish from a contrarian perspective, and not yet outright bearish.
…So, why the overnight bounce? Consider its source. The optimism seems more inspired by the relative favor bestowed by a domestic rate hike. Will Tuesday’s intraday crowd buy into that sentiment and continue marching higher post-open with a stiff upper-lip? Their reward could be a retest of Sunday night’s 2265.00 high, and also to neutralize the “unfinished business above” of an eventual new trend high close. That would be a trap, to remove upside attractions when they’ll be needed most. Reversing back down this morning could still be part of a multi-session pullback, with likely objectives of 2215.00 and probably also 2205.00.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2259.00 would be likely to trigger the 2256.50 bias-up signal at 10:15. Exiting the open under 2253.25 would be unlikely to trigger bias-up.