The First Trade & Pre-open Tour Recording… Resolving the bearish template.
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 bearish template developed fully, with one exception — the bearish resolution. Having held a test Monday of the corrective bounce’s 2725.25-2727.75 objective, a failed intraday probe above it (i.e. distribution) was needed to kick-start the reversal. The probe happened up to 2734.50 before the open, and the reversal was underway down to 2710.25 during the bias environment exit. But a knee-jerk reaction to a tariffs headline triggered a recovery that ranged sideways around 2725.25-2727.75 through the close. Unfinished business below was left outstanding at the morning’s 2704.75 bias-down signal.
Overnight action’s new info…
Who knew. Apparently, the White House Chief Economic Advisor is critical to market stability. At least, that’s implied by Tuesday night’s 24-27 point gap down to 2700.00 in reaction to Gary Cohn’s resignation. And that eventually extended down to 2681.25. The test of “lower prior highs” at 2683.00 from last Friday afternoon reacted up until touching 2704.75, Tuesday morning’s unfinished business that is now neutralized. A shallower dip to 2685.00 was recovered almost entirely to 2704.75 through Europe’s opens. A 10-point range that formed since then just blipped-up to the 2707.00 bias-down target’s resistance, and reacted back down into the range.
If, then…
Knee-jerk reactions to news tend to be retraced to their origin, so filling the gap back to Tuesday’s close shouldn’t be surprising. But that’s not a timing mechanism, a requirement or even an influence, so it’s not an impediment to extending down. Meanwhile, there wasn’t any bullish reason last week to revisit 2701.00 or 2682.00, so the alternative to not holding their tests today could be to trend sharply lower. The immediate question isn’t about resolution, but the path there. The intraday crowd hasn’t yet had the opportunity to react to last night’s news. Another corrective bounce into or through the open up to 2713.25 or 2718.75 should still be shallow enough to attract sellers, but any higher could inhibit them to think the storm has passed. Otherwise, not holding the 2695.00 area through the open would mean strong hands aren’t waiting for more strength to sell into.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2718.75 would be unlikely to trigger the 2717.00 bias-down signal at 10:15. Exiting the open under 2713.25 would be likely to trigger bias-down. Exiting the open under 2704.75 would be likely also to exceed the 2707.00 bias-down signal at 10:15 to renew the bias-down signal.