The First Trade… Not rejecting.

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’s session had recovered from probing fresh lows overnight down to 2116.00. Potential to 2137.50 was attacked to within 5 ticks when the FBI headline triggered a 23-point plunge to fresh lows at 2112.50. Bouncing choppily into the last half-hour attacked 2128.00, retracing 61.8% of the plunge. No “unfinished business” was left outstanding but it was the fourth consecutive lower close and lower intraday lows.

Overnight action’s new info…
Sunday night’s open blipped-down to 2114.75 and bounced quickly into a 2119.00-2122.00 range. An eventual breakout rallied up to 2130.50, 7-8 points back into positive territory. Its retracement has been attacking 2124.00.

If, then…
The origin of Friday afternoon’s plunge was a little premature. But not by much and not at all unexpected — the overnight low’s retracement was likely. The plunge’s 61.8% retracement also tested “higher prior lows” before the close, fulfilling a correction. Bouncing overnight doesn’t preclude launching a new downleg, not this shallow of a bounce, not without also gapping up above Friday afternoon’s highs (currently 11 points higher). Four consecutive lower closes all but require at least an intraday fresh low before any recovery would be credible.

First Trade…
[Click here to view the Bias parameters] Exiting the open under 2127.75 at 9:45 would be unlikely to trigger the 2131.00 bias-up signal at 10:15. Exiting the open above 2121.25 would be unlikely to trigger the 2117.50 bias-down signal. Exiting the open under 2116.75 would be likely to trigger bias-down.