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The First Trade… Not for lack of trying. – If, Then… Market Timing

The First Trade… Not for lack of trying.

By Rod David | September 19, 2016 - 7:37 am

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…
Friday had gapped down back under 2134.00 and slid to attack 2123.00. Bouncing 10 points was retraced by an afternoon dip retesting 2123.00. RSIs were borderline oversold as support was chipped away, but the balance of the session retraced its midday bounce. Resistance held at 2134.00, so the distributive signal remains intact. Distributive action persists, resistance held when it had an opportunity to recover, and any unfinished business is below..

Overnight action’s new info…
Sunday night can be characterized as optimistic. Its flat open didn’t wait long before price suddenly spiked up 8 points to 2141.00. The wait was a lot longer before extremely narrow ranging around 2139.00 suddenly surged again to probe higher into Europe’s opens. Twice testing 2144.00 has come within 1 tick of Thursday morning’s 2144.50 high, and its overbought RSIs, both times reacting down under 2141.00.

If, then…
Friday afternoon’s buyers gained no traction, so rallying this morning requires gapping up, which is currently indicated. But it could face a new challenge if Thursday morning’s 2144.50 high were to hold a test as resistance — especially if its reaction were to exit the open back under Thursday’s 2140.00 and/or 2137.50 closes. Exiting the weekend with extreme sentiment can often be a sentiment extreme, and rallying ahead of this week’s FOMC and BOJ statements may be difficulty. Otherwise, successfully negotiating Thursday’s highs would next target “higher prior lows” beginning at 2149.00 to above 2150.50.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2143.50 would be likely also to exceed the 2141.50 bias-up target through 10:15 to renew the bias-up signal. Exiting the open above 2138.00 would be likely to trigger the 2136.00 bias-up signal at 10:15, unless Thursday morning’s 2144.50 high were tested first,.

Posted in members-only, S&P, The First Trade