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…
Monday morning”s recovery from gapping down to 1875.00 became an afternoon series of small non-accumulative swings. Raching 1898.50 at the cash session close, AAPL”s favorable earnings pushed that up to 1904.50 before the Globex open.  Unfinished business below as left outstanding at the 1874.00 and 1890.00. But buyers gained traction for their efforts, exiting the bias environment above the noon hour”s high, and entering the final hour probing both.

Overnight action”s new info…
Reaction to the reaction… Already having discounted AAPL”s favorable earnings before its open, Globex slid relentlessly to retest  Monday”s noon hour lows. That was the low and it was retraced well above Monday”s highs, thanks to a headline that ECB is planning to inject liquidity by buying European corporate bonds. That sparked a 31-point rally, reversing the initial 19-1/2 point slide from within 1 tick of this morning”s 1885.50 target by 31 points to probe 10 points above this morning”s 1906.50 bias-up target — which a dip is now testing.

If, then…
The overnight slide probed under levels where gapping open would have reversed the trend down. Gapping so deeply would have been the only path down, since yesterday afternoon”s buyers had gained traction to signal higher highs for this morning. Despite that signal seemingly about to be fulfilled by higher highs this morning, I give the rejection attempt more credibility. I”m not looking at a different price quote than you are — rather, I”m preparing for the overnight rally to peak at or just after the open, if not before — which would put back into play the overnight intentions. Not confirming the reversal through the open would mean the overnight rally had gained sponsorship to be duplicated and extended this morning.

First Trade…
Exiting the open at 9:45 back under 1904.50 would be unlikely to exceed the 1906.50 bias-up target through 10:15, and that would fail to renew the bias-up signal. Exiting the open under 1898.25 would be unlikely to trigger the 1901.25 bias-up signal, which would put into play at least a test of the 1993.25 bias-down signal.