The First Trade… Recovering yesterday.
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…
After Tuesday’s session-long rally to attack its 2080.50 target, Wednesday’s gap down to 2074.25 didn’t signal strong-handed selling pressure. But not immediately rallying did keep the door open to extending the overnight pullback. And that’s what happened after a momentary surge to 2087.50 with Crude Oil. The morning probed overnight lows down to 2069.00 and the afternoon resumed the decline to within 1 tick of 2059.50. It was an “inside day,” but sellers gained traction.
Overnight action’s new info…
The drop’s next two targets had been 2059.50 and 2058.00, and the latter was quickly pierced by 2 ticks. Its reaction up to 2062.00 was retraced entirely. The next bounce to 2064.00 was retraced almost entirely, too. The next bounce has extended up to 2071.50.
If, then…
Yesterday’s post-market Wrap described several bullish influences operating on yesterday’s decline — such as it being an inside day, extended by a Symmetrical Triangle, and the afternoon’s drop being “no-bias trending.” The only bearish influence was the afternoon’s sellers gaining traction. Sellers’ traction can be inverted by rejecting the afternoon’s decline from the bias environment’s 2069.50 high. Since yesterday ended by trending down, the same rejection would also form a “session-long rally” setup. The overnight rally is in position, so failing to exploit the opportunity would be as bearish as the missed opportunity would have been bullish. And it’s pretty bullish, both targeting Tuesday’s high and then also likely resuming the rally.
First Trade…
Exiting the open at 9:45 above 2071.00 would be likely to trigger the 2067.50 bias-up signal at 10:15. Exiting the open above 2077.75 would be likely also to exceed the 2074.00 bias-up target at 10:15 to renew the bias-up signal. Exiting the open under 2066.00 would be unlikely to trigger the 2067.50 bias-up signal.