The First Trade… The overnight gets it.
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…
Tuesday’s rally began after first retesting the 2133.25 overnight low by 2 ticks. Reacting up quickly touched 2148.25. Its correction was retraced entirely, in time to extend the recovery during the noon hour to attack 2153.00. Bias-up was confirmed by slightly higher highs at 2154.00, ensuring the 2155.00 bias-up target would become “unfinished business above.” The balance of the session hovered choppily just under that objective.
Overnight action’s new info…
Eventually dipping, Tuesday morning’s highs were probed by 1 point down to 2147.00. Already having firmed into Europe’s opens, a surge was triggered that extended up to 2158.00. That was short-lived, as it quickly became the head of a Head & Shoulders reversal pattern. Its reversal leg plunged, piercing yesterday morning’s highs by only 1 tick has now reacted back up to 2152.00.
If, then…
Hovering yesterday afternoon just 1 point under its 2154.00 target is pessimism, which can be bullish from a contrarian perspective. Surging overnight 3 points through its outstanding target illustrates the effect of pent-up demand created by the delay. The overnight high’s brevity suggests there remains enough pessimism to enable another rally post-open. But it also confirms the recovery remains tenuous. Resuming the rally this morning would still be credible, presumably by gapping up. “Unfinished business above” at 2175.50 could be further delayed by a morning dip, and altogether avoided by downtrending that breaks under 2143.50.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2151.25 would be unlikely to trigger the 2155.00 bias-up signal at 10:15. Exiting the open above 2157.50 would be likely to trigger bias-up. Exiting the open above 2161.75 would be likely also to exceed the 2160.25 bias-up target through 10:15 to renew the bias-up signal.