The First Trade… Waiting for another shoe.

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…
Thursday’s open gapped down to test Wednesday’s 2168.75 low, and snapped back up to avoid triggering bias-down. Its offsetting test of the 2178.75 bias-up signal became “unfinished business above,” with 2177.00 resistance defining the session’s high. In fact, while 2177.00 was likely to be an obstacle to the rally, its reaction retested the open’s low down to 2167.50. The cash session bounced back up to 2172.00, and futures closed at 2174.25.

Overnight action’s new info…
Thursday’s late bounce firmed slightly to touch 2175.00. Choppy ranging into Europe’s opens held 2172.75.as support while piercing slightly higher to 2176.25. Another dip has returned back down to 2172.75.

If, then…
Following yesterday’s two near-death experiences of probing Wednesday’s low, the overnight quiet may seem reassuring. Rather, its narrow range is like a thug waiting around the corner up ahead, on a deceptively quiet street. That corner is the cash session open, which is where it will either jump out at the market to attempt another break lower, or else shrink away to allow another bounce into the weekend… Not extending down Thursday doesn’t mean the decline has lost any traction or momentum. Closing under 2177.00 kept those elements alive. That should prevent another corrective bounce — if the decline is going to extend eventually, then there isn’t any reason to further delay it today. But whichever direction the morning takes, don’t forget that Friday mornings can be exacerbated by the two days of illiquidity bearing down.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2174.25 would be unlikely to trigger the 2177.00 bias-up signal at 10:15. Exiting the open under 2166.00 would be likely to trigger the 2166.00 bias-down signal.