The First Trade… Half-step forward, tip-toe back.
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 afternoon’s 2255.75 low had attacked the morning’s low to within 3 ticks, while retesting the afternoon’s 2256.75 bias-down target. Its reaction extended higher through the close, attacking 2272.00 to within 1 tick — a relevant level that happens also to be last Friday’s trend high close. Oversold 1-minute RSI at the low was narrowly avoided. The intraday recovery didn’t gain traction only because the noon hour’s high wasn’t recovered early enough.
Overnight action’s new info…
No matter the potential or even the likelihood for rallying intraday Thursday, the path higher was vulnerable to an overnight drawdown. Defined by this morning’s 2264.00 bias-down signal, the relentless overnight pullback has twice tested this limit. The second test is now bouncing from 2260.75.
If, then…
Sooo close, in two regards. First, closing yesterday above 2272.00 wouldn’t have been any likelier to avoid an overnight dip, but it would have been likelier to resume yesterday afternoon’s rally this morning. Second, yesterday’s high touched last Friday’s new trend high close, and yesterday’s close was within 1 point of it. A new trend high close remains outstanding, and there’s no assurance of its timing. As the overnight pullback shows, even the proximity to prior highs doesn’t ensure extending higher. Even probing new highs won’t ensure closing higher. Holding a test of this morning’s bias-down signal (now being tested) would at least make new highs likely intraday. While triggering bias-down would likely only delay new highs, that delay is still vulnerable to probing under yesterday’s lows.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2266.00 would be unlikely to trigger the 2264.00 bias-down signal at 10:15. Exiting the open under 2260.50 would be likely to trigger bias-down.