The First Trade… Yesterday’s lingering effects.

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…
Tuesday’s gap down to 2153.00 quickly slid through “lower prior highs,” a gap, and prior lows. That much selling pressure in one fell swoop is unusual enough. More unusual is not to react and retrace, at least correcting the price drop. Instead, the slide extended down sharply and relentlessly through the afternoon’s 2125.25 bias-down target to 2121.75. Bouncing into the cash session close recovered back up to 2131.00, which was the afternoon’s bias-down signal. The futures close extended to within 1 point of the late bounce’s 2136.00 objective. Oversold RSIs were left outstanding at the low.

Overnight action’s new info…
The late bounce eventually extended to touch 2140.75, which is this morning’s bias-up target. Reacting down into and out of Europe’s opens tested 2130.00. Bouncing from there is now testing 2134.00.

If, then…
Selling that lacks any singular, generally accepted cause is difficult to bottom. Tuesday’s eventual bounce was accompanied by news of Russia’s comminique to its diplomats. Was that behind the selling, or was the market just so willing to accept it? Regardless, it doesn’t make the decline bullish. And it doesn’t allow an immediate recovery without retesting yesterday’s low — the most bullish scenario must probe lower intraday before recovering. The most bearish setup would try recovering prematurely. Trending at all today, let alone extending down further, could be hampered by low volume due to the Yom Kippur holiday, when many Jewish participants are away from the market.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2136.00 would be likely to trigger the 2135.00 bias-up signal at 10:15. Exiting the open under 2131.00 would be unlikely to trigger bias-up.