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 “session long rally” had extended its gap up at 1940.50 16 points higher until violating the latest pullback limit at 1955.25. Several minutes later a sell signal was triggered under 1952.50 by a plunge to 1944.00 in reaction to the NYC Ebola headline. The balance of the afternoon ranged widely up to 1949.50 and down to 1941.50. Overbought RSIs were left outstanding at the high, along with the session-long rally”s final hour fresh high.

Overnight action”s new info…
The market came down with another case of Ebola. Very narrow ranging at 1945.00-1947.00 soon plunged again to 1931.75. More choppiness gradually worked its way back up to 1940.00. 1944.00 and 1945.00. Every reaction up and down overlapped 1937.75, which is being tested now as support.

If, then…
As a rule, knee-jerk reactions to headlines are retraced entirely, often also refueling the prevailing trend being attacked. So, if overbought RSIs at the high require a retest, and the earth explodes, then is the reaction down only temporary? I would argue, “yes.” But, hey, the earth exploded, so what do I care. The latest Ebola scare is one or two degrees less of an economic impact than suddenly having no earth beneath you — the lack of gravitational pull can suck, too. But it still qualifies as a paradigm shift that can abruptly antiquate the strong-handed sponsorship that produced the overbought RSIs. The difference should be in whether the next timing window were to extend the knee-jerk reaction. Regardless of lower lows overnight, triggering this morning”s bias-down or not should tell us whether the recovery is winning, or Ebola.

First Trade…
Exiting the open at 9:45 under 1934.50 would be likely also to trigger the 1939.75 bias-down signal at 10:15. Exiting the open above 1948.50 would be likely to trigger the 1950.50 bias-up.