The First Trade… Giving back, again.

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…
Gapping down Monday held Friday afternoon’s lows to avoid trending down lower than 1912.50. The gap back up to Friday’s 1931.00 close was eventually filled on the way to fresh highs at 1940.00. Reacting down retraced deeply enough not to close above Friday’s 1933.00 high, so its breakout wasn’t confirmed.

Overnight action’s new info…
Monday’s late reaction down extended deeper to test 1924.00. A shallow bounce there resolved down, too, eventually touching 1909.25. Its reaction up is testing 1920.00.

If, then…
Whether a rally is accumulative or distributive depends on its origin, what it probes, and where it closes. Yesterday’s recovery failed to close above resistance that it tested intraday. So, trending up from the morning’s lows was actually distributive. Timing can be revealing, too. This is why not filling the gap back up to Friday’s 1931.00 close until late-Monday would have been vulnerable to reversing down sharply. And it has reversed down sharply, as the 1910.00 high of last week’s range was tested overnight as support. But distribution doesn’t become a downtrend until support is broken through a relevant timing window. That opportunity is presented by the overnight decline. Not recovering above relevant support through the open would be vulnerable to probing into last week’s range down to 1904.50. .

First Trade…
Exiting the open above 1924.00 at 10:15 would be unlikely to trigger the 1921.00 bias-down signal at 10:15. Exiting the open at 9:45 under 1918.50 would be likely to trigger bias-down. Exiting the open under 1911.50 would be unlikely to recover the 1915.50 bias-down target at 10:15, renewing the bias-down signal.