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The First Trade. – If, Then… Market Timing

The First Trade.

By Rod David | October 31, 2014 - 8:27 am

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…
Yes, or no… The outstanding attraction back to 1984.25 cut both ways. First, it encouraged the morning”s rally after an overnight dip had held the same 1966.00 support as Wednesday”s FOMC reactions. Then, it attracted a probe up to 1994.00 back down to it. Closing above it attacking 1990.00 came too late with no complexity, leaving unanswered whether 1984.25 was holding or being exceeded.

Overnight action”s new info…
Ummm, exceeded maybe? Ranging around 1990.00 suddenly surged to 2004.00 on news of the FOMC being unfashionable. Not only is no one following their lead, but quite the opposite — Bank of Japan both increased its QE program and widened eligible securities.The initial surge extended another 12 points to attack 2017.00, probing both the 2012.25 prior intraday high and 2014.50 “new Globex trend extreme.” Its reaction down has held the surge”s original 2004.00 peak.

If, then…
No “new Globex trend extreme” left behind. Add last night”s 2016.75 to those now outstanding. They are historically mandated to be retested intraday. So, the Sep 18 2014.50 overnight high remains on that list, too. Their retest is not satisfying buying pressure, so they are not resistance. But retesting a prior extreme does introduce vulnerability to reversing direction. (Note that the levels identified below with “+/-” mean to include the range that is 2 ticks either way.)

First Trade…
Exiting the open at 9:45 above 2003.00(+/-) would be likely to extend to 2022.00(+/-), with room for noise above it to 2025.75(+/-). Opening under 2003.00(+/-) would be likely at least to test this morning”s 1996.25 bias-up target.

Posted in S&P, The First Trade