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The First Trade. – If, Then… Market Timing

The First Trade.

By Rod David | December 5, 2014 - 7:51 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…
Thursday”s 2069.75 opening print was recovered during the noon hour, after the morning probed under it down to 2061.25 (no ECB stimulus proposal). Spiking above it to a new high at 2076.25 (possible ECB stimulus proposal) reversed back to 2069.75 again. The reversal extended down another 4 points (doubts about ECB stimulus proposal), but rallied 7 points into the futures close which tested 2073.00. Oversold RSIs at the low require a retest. A knee-jerk reaction to news produced overbought RSIs at the high, so they don”t require a retest.

Overnight action”s new info…
Trending and choppiness tend to be limited ahead of an Employment Situation report. Last night was no exception. A very narrow range centered around 2072.00 did rally once at Europe”s opens. Its reaction down from 2075.00 has formed a Symmetrical Triangle supported by 2073.00.

If, then…
Greeting the Employment Situation report at the highs tends to probe higher intraday. Recovering from an intraday probe into negative territory also helps to create upside potential. So, an initially negative knee-jerk reaction down would get a benefit of the doubt for recovering and reversing. But regardless of whether positive territory were probed initially or after recovering from below, the pattern remains vulnerable to trending down into the weekend. Probing new highs is not required, and could be made irrelevant by simply failing to trigger bias-up.

First Trade…
There are no preliminary levels before an Employment Situation report.

Posted in S&P, The First Trade