The First Trade… What FOMC giveth, BOJ taketh away.

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 morning’s choppy ranging in negative territory had dipped 10-12 points down to 2076.25, draining the market of optimism ahead of the afternoon’s FOMC statement. Its knee-jerk reaction down to 2077.50 stopped short of neutralizing oversold RSIs at the low before reversing up above prior highs to 2094.00. The rally gained traction by exiting the bias environment above the noon hour’s high and then trending to fresh highs through the 3:10-3:20 proxy window. A late dip fell to 2088.00.

Overnight action’s new info…
The last-minute dip was gradually recovered entirely, eventually touching 2094.25. The BOJ policy statement took a surprising twist by not increasing asset purchases. The Nikkei crashed 1000 points, while ES plunged 20 points to 2074.00. Bouncing to 2083.00 has resolved down to lower lows at 2070.25.

If, then…
Only the most die-hard Keynesian still truly believes there is an endless supply of stimulus. Unfortunately, those people tend to work for a central bank where they can keep playing that tune. Well, did their music just stop? BOJ’s decision seems truly to be a surprise, less because of the plunge it triggered, and more for coming after yesterday afternoon’s buyers had gained traction. So far, only Monday’s 2071.00 low is being retested, with room below it down to 2067.00-2069.00. Any lower could get ugly, but rallying back above relevant levels by mid-morning would suggest the surprise had been absorbed.

First Trade…
Exiting the open at 9:45 back above 2080.50 would be likely to hold the 2076.00 bias-down target through 10:15. Exiting the open above 2086.25-2087.00 would be unlikely to trigger the 2083.75 bias-down signal.