The First Trade & Pre-open Tour Recording… The C-bet.
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Tuesday’s choppy overnight range had tried at first to extend the afternoon’s bounce to 2640.00, only to eventually try defending against extending Tuesday morning’s plunge to 2616.00. Wednesday’s flat open at 2632.00 did initially plunge to probe fresh lows at 2611.00, but that action was isolated to the opening 15 minutes of volatility. The balance of the session trended up, including a midday flat-to-higher range resisted by 2636.00. A late surge to 2644.00 was retraced 14 points and then recovered ahead of Facebook’s earnings.
Overnight action’s new info…
Favorable reaction to FB earnings extended Wednesday’s late recovery to attack 2655.00. A narrow consolidation there broke lower through midnight, testing 2640.00 into Europe’s opens. Stopping 1 point short of yesterday’s cash session close was enough to launch a bounce back into the earlier consolidation up to 2652.00.
If, then…
A basic poker betting strategy is called the “Continuation bet,” or c-bet. It refers to the lead bettor of the first round leading out on the second round, regardless of whether his hand improved. It’s often a bluff, but the c-bet shakes out weaker hands anyway. Similarly in markets, one session’s trending tends to extend into the following day, a c-bet regardless of it being momentum or actual accumulation. Overnight action has held up yesterday’s late surge, although we already know yesterday’s low doesn’t qualify as a completed bottom. Its initial follow-through was brief, and its eventual retracement was shallow, both of which are indications of excessive optimism. If maintained through Thursday’s open, then a morning rally would get every benefit of the doubt. But another round of betting precedes the open, and it is a reliable catalyst for volatility — the ECB policy statement and Mario Draghi press conference.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2650.50 would be likely to trigger the 2645.75 bias-up signal at 10:15. Exiting the open under 2640.75 would be unlikely to trigger bias-up.