The First Trade… Warning shots.
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…
Wednesday’s late-afternoon 2112.00 low had pierced Tuesday’s low by a single tick. That was bearish enough to all but ensure lower lows on the horizon, whether immediately or delayed. Delayed. The last half-hour bounced up to 2119.50, almost all of it retraced by spiking down into the futures close. The stopped WedEX from triggering an optimal signal, other than it not rejecting the cumulative chipping away at support. It was a second consecutive close under 2134.00. But a hold-short was narrowly avoided, and overbought RSIs were left outstanding at the morning’s 2134.50 high.
Overnight action’s new info…
Initial firming was jolted abruptly by a 9-point plunge that was triggered by concerns over next week’s BOJ meeting. The fresh low tested “lower prior highs” from Sunday night’s consolidation down to 2108.00. Completely retracing the drop before Europe’s opens, the recovery extended well into positive territory to greet this morning’s BOE policy statement at 2123.25. The immediate reaction has dipped to 2118.00.
If, then…
I have been noting that this month’s WedEX seems capable of both trending and counter-trending, with substantial moves in either direction. Only several hours after triggering WedEX, we’ve already seen an example of each… Now the overnight rally might seem to make gapping down Thursday more difficult. Perhaps a little, but that’s a function of the recovery’s momentum, which has become quite stretched. The open is still the open, and this morning’s econ calendar is busy (5 reports simultaneously at 8:30!)… Testing Monday’s 2110.50 post-open low overnight has created an attraction that would soon be in-play if the open doesn’t immediately recover a dip back into negative territory. Actually gapping down under 2110.50 still would serve by proxy to trigger a Bearish WedEX. Otherwise, gapping up above 2134.00 is the minimum to even suggest a Bullish WedEX. It is meanwhile resistance.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2121.25 would be unlikely to trigger the 2124.25 bias-up signal at 10:15. Exiting the open above 2121.25 would be unlikely to trigger the 2114.25 bias-down signal. Exiting the open above 2127.00 would be likely to trigger bias-up.