The First Trade… That’s gonna leave a mark.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK(s)
o New! Omnistream
o backup (launched AFTER the tour)
(pre-open Market Tour begins at 8:55 ET)
* backup is launched AFTER the Tour
Through the prior close…
Opening almost flat Tuesday at 2009.00 was retraced to attack Monday’s late 1994.75 buy signal as support. Bottoming just after noon then began recovering back up to the fresh highs testing 2014.00 as the afternoon range narrowed back to 2009.00.
Overnight action’s new info…
Ranging narrowly just above 2009.00 was shocked by another Yuan devaluation, which triggered a slide under Tuesday’s low to 1986.00. That was well before midnight. Firming back up to 1998.00 was shocked by Europe’s opens, which triggered another slide under Monday’s low to 1975.50. That’s down 36 points from yesterday’s close.
If, then…
Narrowing into yesterday’s close had laid the groundwork for gapping sharply at today’s open. The likely direction was down — not likely enough to short at the close, only likely enough for overnight trending to be credible. The likely direction was down, since buyers had not gained traction for their considerable efforts since Monday’s too-late surge. Narrowing into yesterday’s close also had laid the groundwork for “equilibrium,” which trends convincingly in one direction, and reverses convincingly at least once. But the first reversal becomes unlikely if opening too far from the orbit of Tuesday’s range, which is defined by 1998.00. Meanwhile, the orbit under Monday’s range reaches 1973.75 and 1965.25. Testing and holding either through a relevant timing window would be credible for launching a reversal back up, or at least a substantial effort. Otherwise, breaking under either would more likely lead to doubling the overnight drop intraday.
First Trade…
Exiting the open at 9:45 above 1987.50 would start to suggest at least a bounce to 1998.00. Exiting the open at 9:45 above 1973.75 after touching it would also suggest a bigger bounce underway. Exiting the open under 1984.00 without yet touching 1973.75 would be likely to extend down.