The First Trade…
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK(s)
o Win XP-Friendly entry
o non-xp friendly (ilinc)
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Friday was an uneventful day, surrounded by two major events. The first was a 25-point overnight rally that reached 1951.00. Reacting down to 1939.00 for the open still gapped up above Thursday’s 1926.50 highs. The morning ranged sideways back down to 1931.00, still comfortably above Thursday’s highs. Firming into the afternoon was ambushed by the second event, a 30-point plunge down to 1910.00. The close reacted up to 1925.00, back under Thursday’s high.
Overnight action’s new info…
Sunday night’s open confirmed that Friday’s plunge was not an anomaly. Fresh lows attacked 1905.00 on more signs of China’s “hard landing.” Despite recovering up to 1928.00 and 1930.00 into and out of Europe’s opens, another downleg has probed fresh lows testing 1904.00, presumably in reaction to Glencore’s continued implosion. Its reaction up to 1912.00 was just retraced entirely back down to 1904.00.
If, then…
Bounces help to absorb subsequent selling pressure before it manages to push price under a relevant level during a relevant timing window. Last night’s bounce is being tested for just that, since its 26-point reaction down has probed under Sunday night’s initial low. That often accompanies knee-jerk reactions to old news, which defines the China and Glencore stories. The open should prove that by barely delaying a recovery when new selling pressure dwindles. Another pre-open bounce might invite a brief post-open dip, first. But not already rallying out of the opening 15 minutes of volatility would suggest instead of absorbing sellers, that the bounces themselves had been absorbed. And despite being triggered by old news, the drop was attracting new sellers.
First Trade…
Exiting the open at 9:45 under 1906.25 would be unlikely to recover the 1908.25 bias-down target by 10:15, which would renew the bias-down signal. Exiting the open above 1912.25 would be unlikely to renew bias-down. Exiting the open above 1919.00 at 9:45 would be unlikely to trigger the 1914.00 bias-down signal at 10:15.