The First Trade… Oh, what a night.

Proper context can start the day with a solid win and make all the difference.

CHARTROOM LINK <<==click here
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
Yet another gap up Tuesday once again returned all post-open gains, once again reversed into negative territory, and once again failed to recover through the close. The attempt to reject Selling from the 1907.50 overnight high persisted to exit the afternoon’s bias environment under 1865.00-1868.00, attacking 1856.00. Bouncing into the final hour extended up to 1882.00.

Overnight action’s new info…
China’s open immediately triggered a drop back toward Tuesday’s low. Sliding through it to 1851.00 extended to 1838.00 and eventually 1829.25. That’s down 40-43 points from Tuesday’s cash session and futures closes and finally touches August’s 1831.00 overnight low. A bounce to 1843.00 has been consolidating.

If, then…
Gaining traction yesterday would have allowed the decline to resume today despite an opening bounce. NOT gaining traction required extending the decline only by gapping down. The open is indicated to gap down. And this, immediately after the overdue Up/Down-Crash setup rejected yesterday’s up-crash opportunity. Capitulation, at last? Well, a hallmark of this three-week decline has been self-preservation, repeatedly attracting bullish bottom-fishers that continually refuel sellers. We’ll monitor for a Wreversal Wednesday that once again interferes with ripping off the band-aid, extending the pain. Capitulation, but not necessarily “at last.”

First Trade…
Exiting the open at 9:45 above 1840.00 and 1846.00 would be increasingly likely to probe back into yesterday’s range up to 1863.00-1865.00. Exiting the open under 1834.25 would maintain momentum toward the next lower objective at October 2014’s 1813.00 low.