The First Trade… Done waiting.
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…
Monday’s session was choppy but only ranged around Friday’s close. It was narrower than the overnight range, which was narrower than Friday’s range. But there was at least one predictive feature. The morning’s 2120.00 low stopped optimistically short of touching Friday’s lows. And it was retested after an intraday bounce had probed fresh post-open highs. The first bounce is potentially bearish from a contrarian perspective. Returning to the bounce’s origin all but requires at least an obligatory low. It had become too late to attract sponsorship for breaking lower, making another interim bounce likely, first.
Overnight action’s new info…
Last night’s range is wider than Monday’s. The Globex open quickly fulfilled the intraday corrective bounce potential up to 2124.25-2125.00. But there was greater potential for extending the corrective bounce overnight. It was fulfilled by only attacking yesterday’s 2130.50 intraday high to within 1 point. Its reaction down to 2123.25 bounced 4 points, but that bounce is now reacting back down through 2124.25-2125.00.
If, then…
Monday’s relatively narrow range was disappointing. Especially after Friday’s luscious volatility of a failed recovery and its deep drop. But Monday’s multiple fluctuations between positive and negative territory kept volatility alive. And last night’s range was as wide or wider than Monday. Perhaps anxiousness ahead of tomorrow’s somewhat predictable FOMC policy statement has already had a paralyzing effect. Still ranging narrowly through today is a lot of patience to ask of the market. Holding under 2124.25-2125.00 post-open would keep alive the likelihood for a pessimistic dive under Monday’s 2119.00-2120.00 lows, retesting Friday’s 2112.50 low down to 2105.00, and possibly another 10 or 25 points lower. Avoiding any pessimistic dive today would make a bigger bounce likely, and then its failure.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2127.75 would be likely to trigger the 2125.50 bias-up signal at 10:15. Exiting the open under 2124.25 would be unlikely to trigger bias-up. Exiting the open under 2116.00 would be likely to trigger the 2117.75 bias-down signal.