The First Trade… Isolated sellers?

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 gapped down to the 2268.25 target of Friday’s late sell signal. That also tested “lower prior highs” from Wednesday and Thursday. And ultimately after touching 2263.50, the morning’s 2265.50 bias-down signal held. But the reaction stopped short of filling the gap back up to Friday’s 2271.25 close. Such pessimism persisted through the session, without producing a break lower. The morning’s 2275.50 objective was left outstanding.

Overnight action’s new info…
Monday’s late dip to fresh afternoon lows at 2264.00-2265.00 barely delayed extended much lower. First dipping to 2262.00 was consolidated, and then extended to 2259.50 soon after midnight. But a steep rally greeted Europe’s opens at 2266.00. A quick reaction down attacked 2262.00 and soon recovered entirely.

If, then…
Of two or three bullish templates at this stage, overnight action is tracking one — isolation. Probing a fresh low overnight can be isolated by maintaining an open back above Monday’s lows. The minimum reward for this setup would be to probe above Friday’s 2277.00 high. Now that fresh lows have been probed overnight, also rejecting a fresh post-open low could reverse momentum up intraday. Regardless, not exploiting either bullish setup this morning would reinforce Monday’s break. And that would essentially point down into Wednesday morning, or longer, to 2247.00 or 2235.50.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2266.00 would be unlikely to trigger the 2263.00 bias-down signal at 10:15. Exiting the open under 2268.50 would be unlikely to trigger the 2271.50 bias-up signal.