The First Trade… Digging deeper.
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 open back under Monday’s highs had isolated the overnight probe of fresh highs, which had fulfilled the 2150.00 objective. Retesting Monday’s 2140.50 low bounced high enough for long enough to avoid triggering bias-down. But its upside objective was ignored as the reversal down extended to enter the noon hour at the morning’s 2135.50 bias-down target. Bounces twice tested 2140.50 as resistance, and twice failed, again attacking 2135.50 into the close, making at least an obligatory probe lower likely. An offsetting test of the morning’s 2148.00 bias-up signal was left outstanding.
Overnight action’s new info…
Anxiousness ahead of AAPL’s post-close earnings is somewhat responsible for containing Tuesday afternoon’s range. Its negative reaction garnered sympathy as fresh lows developed quickly down to the 2132.00 area. Another downleg began at Europe’s opens in sympathy with Italian bank Monte Paschi resuming its slide. Fresh lows attacking 2126.25 have reacted up to test 2130.00.
If, then…
Tuesday’s open produced two normally powerful signals that happened to contradict each other. If they neutralized each other’s influence intraday, once seems to be winning out overnight. Isolating Monday night’s test of the 2150.00 objective has now reacted down almost 24 points. The decline’s timing has had weak-handed sponsorship at least twice — first, after yesterday’s open had held tests of prior lows, and now overnight. The overnight influence is legitimately bearish, but may be discounted sufficiently to prevent getting much more sympathy from intraday participants. Attracting sponsorship for a recovery need not be obvious immediately, but the overnight lows must hold to avoid probing well under expiration Friday’s 2123.25 low.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2125.00 would be likely also to exceed the 2127.75 bias-down target at 10:15 to renew the bias-down signal, next targeting 2121.25. Exiting the open under 2130.00 would be likely at least to trigger the 2133.50 bias-down signal at 1015. Exiting the open above 2133.50 would be unlikely to trigger bias-down.