The First Trade… Moments of truth.

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’s price tracked perfectly with the topping pattern described during the Saturday Review. Gapping down shallowly and recovering into positive territory, then closing only slightly positive. No higher objective was left outstanding.

Overnight action’s new info…
Only downtrending has defined price action since yesterday’s close. Soon sliding 12 points back down to attack Monday’s 1988.25 afternoon low, then resolving a shallow bounce to fresh lows to 1980.75. Perhaps it was only a “warning shot across the bow,” as a bounce back up to yesterday’s 1986.00 low  has surged further up to 1994.00.

If, then…
The topping patterns isn’t just optimal — it’s perfect. That always makes me suspicious, but I’ll give it a benefit of the doubt until proved otherwise. The actual capitulation — the sudden exponentially growing mass realization that the music has stopped — should not become obvious until Tuesday afternoon or Wednesday morning. Last night’s fresh low under Friday and Monday’s lows is acceptable as a warning shot, and should be followed by one last gasp up into the range. Already trending down this morning would still get that benefit of the doubt, and also a dose of suspicion. Regardless, only a strong rally would start to disqualify the topping pattern.

First Trade…
Exiting the open at 9:45 under 1984.00 would be likely also to trigger the 1985.00 bias-down signal. Exiting the open above 1988.00 would be unlikely to trigger bias-down.