The First Trade… A pause between dropping shoes.

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…
Gapping up to 1881.00 had extended higher through the noon hour to attack 1900.00. That was pessimistically short of Friday’s prior highs. Dipping to 1888.00 was recovered only to 1897.25 before the close, and only momentarily as 1888.00 was retraced through the futures close… before AAPL’s earnings.

Overnight action’s new info…
Reaction to AAPL’s earnings triggered a gap down to 1885.00 that extended immediately to attack 1881.00. Price action since then has ranged choppily sideways — testing 1890.00 above and 1879.00 below —  all centered around 1885.00. Currently a bounce is testing 1887.50.

If, then…
With no trending effort having been made yesterday afternoon, it’s not surprising that no traction was gained either way. So, gapping open beyond the afternoon’s range can be the only way to launch trending for the morning. Both gapping open AND extending through the open. Gapping but NOT extending would more likely return into the range. That setup can at least resemble trending, attracting price back to yesterday’s highs. Trending beyond the range this morning is more difficult with this afternoon’s FOMC policy statement looming ahead.

First Trade…
Exiting the open at 9:45 under 1885.00 would be likely to trigger the 1887.50 bias-down signal. Exiting the open above 1892.00 would be unlikely to trigger bias-down.