The First Trade… Only a deeper stretch?

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…
Wednesday’s gap up was its most promising moment, but not the only one. The bias-up target was then exceeded to renew the bias-up signal, but its next higher objective wasn’t met. A couple of blips-up probed fresh highs, but they stopped as quickly as they had started. Other than no trending back down, that wasn’t much reward for inverting the downside traction gained by Tuesday’s decline. It didn’t prevent the last hour’s reaction down from 2158.00 to 2152.00, and it didn’t leave any “unfinished business above.”

Overnight action’s new info…
Extending Wednesday’s late reaction down another point to test 2151.00 was recovered into Europe’s opens to attack 2156.00. But that soon peaked coming out of Europe’s opens, and it eventually reacted down with an even bigger drop testing this morning’s 2147.75 bias-down signal.

If, then…
The aggression of Wednesday’s late drop was relative to the session’s otherwise narrow range.  Despite being steep and deep, the drop didn’t damage the intraday pattern of coiling and pent-up buying pressure. If anything, it fulfilled the template that had been warning a rubber band effect could be needed to stretch price down so that snapping back up could re-launch the rally. But stretching that rubber band so late made it difficult to attract new sponsorship. Still not snapping back up this morning would be likely to gap down, such as last night’s price action is now indicating. Which is still not bearish, and could be an even bigger rubber band stretch — unless gapping down were to maintain a break under Wednesday’s 2149.75 low.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2146.25 would be likely to trigger the 2147.75 bias-down signal at 10:15. Exiting the open above 2150.50 would be unlikely to trigger bias-down.