The First Trade… Not yet backing down.

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…
The new year arrived with a gap up from 2236.50 and rally Sunday night, a gap up and rally through Monday’s open up to 2259.50, and then a plunge through the morning down to 2239.50. The plunge retraced only the overnight lows, which was still 4 points above Friday’s close. That was 2240.50, which had been relevant support — albeit brief support — on Friday. Being a new year, it was tested throughout two timing windows, and then broke higher during the 3:37-3:52 position-squaring window to its 2252.25 target..

Overnight action’s new info…
Except for the open’s brief dip to 2251.00, yesterday’s late rally has only extended higher overnight. The slope is shallow, but steady, eventually touching 2257.00. Reacting down nearly 3 points has recovered entirely.

If, then…
Gapping down under yesterday afternoon’s lows could have formed a “session-long decline,” which would have proved instantly that the late surge was a false break. That’s not happening. Gapping up isn’t immune to reacting down post-open, but the overnight gain and late surge can absorb a lot of selling pressure before damaging their uptrend. that’s if there’s a reaction down, at all. The overnight rally stopped pessimistically short of resistance at 2257.50 before its deepest correction. That pessimism can be bullish from a contrarian perspective. A morning rally will be likely so long as any post-open reaction is shallow, or simply avoided. Otherwise, a post-open dip will have room before targeting a retest of yesterday’s lows — which is required eventually, and now even likelier to break lower at that time.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2250.50 would be unlikely to trigger the 2253.50 bias-up signal at 10:15. Exiting the open above 2255.50 would be likely to trigger bias-up.