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The First Trade… – If, Then… Market Timing

The First Trade…

By Rod David | April 16, 2015 - 7:26 am

Proper context can start the day with a solid win and make all the difference.

NOTE: EMAIL ME IF YOU”RE ENCOUNTERING DIFFICULTY ENTERING THE CHARTROOM THIS MORNING.

Enter the chaRTroom here
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
Wednesday”s gap up from 2090.00 to 2095.50 extended higher, retesting last week”s 2101.25 high. This had created plenty of room for dipping back down to 2095.50 into the morning bias environment”s exit, without damaging the uptrend”s momentum. The afternoon”s bias environment surged higher to test 2105.50. A late dip back under the morning”s high ended just under 2100.00, fulfilling the higher close that last week”s confirmed breakout had put into play. WedEX triggered passively bullish.

Overnight action”s new info…
Narrow sideways ranging up to 2102.75 began probing lower into and out of Europe”s opens. The drop has steepened and extended to probe not only yesterday”s 2095.50 lows, but to also touch the upper-end of Tuesday”s 2088.00-2090.00 “lower prior highs.”

There culprit appears to be Greece, which apparently is experiencing some sort of cash flow issue, i.e. not news.

If, then…
The sponsorship behind yesterday”s late dip was weak-handed. Extending lower overnight can prove to be weak-handed by remaining within the range. And that range”s lower-end is Tuesday”s 2088.00-2090.00 “lower prior highs” — whose upper-end has been touched. Somehow recovering enough for the post-open action not to print under yesterday”s 2095.50 low would suggest that momentum had reversed up. The longer that a bounce doesn”t recover 2095.50, the likelier it has only refueled sellers to resolve down. If the open”s gap down holds within the 2088.00-2090.00 orbit, then WedEX could become passively bearish by proxy.

First Trade…
Exiting the open at 9:45 under 2093.25 would be likely to trigger the 2095.00 bias-down signal at 10:15. Exiting the open above 2097.00 would be unlikely to trigger bias-down. Exiting the open above 2101.25 would be likely at least to test the 2104.75 bias-up signal.

Posted in S&P, The First Trade