The First Trade.
Proper context can start the day with a solid win and make all the difference.
Enter the Chartroom here (pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Thursday”s third consecutive lower open around 2089.50-2091.50 held its bias-down signal to put into play an offsetting test of the morning”s bias-up signal, which was fulfilled by rallying 12 points into noon. The noon hour”s drop ended the wide range, but the balance of the session was still choppy. The same relevant 2094.25-2095.50 area essentially defined the third consecutive session”s close.
Overnight action”s new info…
Drifting back down to 2092.50 bottomed into Europe”s opens. Firming to 2096.75 was soon explained by an anti-Grexit headline (Greece accepts most of the terms) whose reaction surged to 2098.50. It was corrected by pro-Grexit news (ECB preparing for Grexit) that retraced the surge and much of the firming down to 2094.00. Another pro-Grexit headline that soon followed (German-led bloc willing to accept Grexit) didn”t produce a fresh low. Only a much later delayed-deal headline triggered a break back to the 2092.50 overnight low, and than several ticks lower.
If, then…
Thursday”s lower open was a reaction to a pre-open surge, whose catalyst was an anti-Grexit headline. Its reaction”s catalyst was the requisite pro-Grexit headline. History repeats. Most opportunities are produced by the pattern repeating, and other opportunities arise when the pattern doesn”t repeat. Did the latter just happen? Reaction to the last headline (Germany: “Grexit, meh”) was relatively subdued and contained for awhile. The current fresh low”s catalyst spoke to a deal”s timing, and was neither pro nor anti-Grexit. If that”s at all predictive, then expiration”s opening bias can be up. Regardless, don”t forget there is no WedEX bias, only one item of “unfinished business above,” and a fast-approaching weekend of illiquidity. The template of probing fresh highs can branch more easily into rejecting fresh highs if fresh highs are probed early.
First Trade…
Exiting the open at 9:45 above 2098.00 would be likely also to test the 2099.75 bias-up signal. Exiting the open above 2101.50 would be likely also trigger the bias-up signal at 10:15. Exiting the open under 2089.00 would make the 2090.75 bias-down signal likelier to trigger.