The First Trade & Pre-open Tour Recording… You know this pattern.
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 drop was not immediate, but its delay was brief and its resolve was relentless. Monday’s rally can be characterized similarly. Optimism ahead of the new Fed Chair’s first ever congressional testimony had been largely discounted. Tuesday’s outside day finished the discounting early by adding 9-1/2 points above Monday’s cash session high up to 2789.75. Did it also overly-compensate by eventually probing 9-1/2 points under Monday’s low down to 2743.50?
Overnight action’s new info…
That over-compensation shrank before it got wider. And then it shrank again. Firming to 2754.50 was rejected by a dip to fresh lows at 2738.50. Recovering steadily through midnight persisted into and out of Europe’s opens until touching the earlier high. Now its reaction down to 2746.00 has formed an inverted Head & Shoulders pattern.
If, then…
Yesterday’s dip had been consolidating at or above its lowest projected support at 2749.75, until coming to within 3 minutes of the cash session close. A last-minute dip contains the session’s lower lows, which tested “lower prior highs” at 2743.00 through the futures close. Both of these relevant levels have yet to be broken during a relevant intraday timing window. Which would likely extend yesterday’s downtrend through this morning. Otherwise, maintaining an open above yesterday’s lows — then extending it through the open — could form an Isolation pattern to reinstate another multi-session rally. Meanwhile, the overnight Head & Shoulders influence must be obvious during that same initial 15 minutes of volatility to be influential intraday. This is equally true for any overnight pattern’s influence, and a Head & Shoulders pattern’s influence can be bullish or bearish, with specific measurements targeted in either direction. And extending down to the lower targets would be in-line with the 1987-style crash template that’s still tracking.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2753.25 would be unlikely to trigger the 2755.75 bias-up signal at 10:15. Exiting the open under 2740.75 would be likely to trigger the 2744.50 bias-down signal.