The First Trade… It’s happening. 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…
Like morning, like afternoon? Tuesday’s gap up had failed two attempts to extend above 2143.00, and instead reversed down into and out of the noon hour to 2131.00. The afternoon’s weak-handed bounce to 2138.75 failed to gain traction above any relevant price at a relevant timing window. So it was retraced entirely back into the close. The morning’s “unfinished business below” at 2128.25 was attacked to within 3 ticks coming out of the close, which was enough to neutralize its attraction.
Overnight action’s new info…
Price was still hovering at Tuesday’s lows into the BOJ announcement, which triggered a spike down to 2126.25. It recovered as quickly, and the recovery extended substantially. Probing yesterday’s highs by 2 ticks up to 2144.00 finally reacted back down to test yesterday afternoon’s 2138.75 bounce high as support by almost 1 point..
If, then…
The overnight spike down not only tested yesterday morning’s unfinished business, which had been neutralized already, but also oversold RSIs at Monday’s low. Now indicated to gap up around 23142.00 for a third consecutive session, overbought RSIs at Monday morning’s 2146.75 high are likely to be tested. And it’s unlikely to offer durable resistance on the way up to last Monday’s highs around 2151.00. But it would have to done quickly this morning, and aggressively, before price action can become paralyzed by anxiousness ahead of the afternoon’s FOMC policy statement AND Yellen’s quarterly Q&A. Perhaps obligatory resistance around 2146.75 separates the recovery into stages, and still leaves enough time to react down from testing the prior highs.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2139.75 would be likely to trigger the 2136.00 bias-up signal at 10:15. Exiting the open above 2143.00 would be likely also to exceed the 2141.50 bias-up target at 10:15 to renew the bias-up signal.