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 objective to probe back into positive territory at 2077.75 was prevented by a noon hour plunge to fresh lows at 2064.25. The noon hour”s exit plunged again to 2053.75. The late afternoon”s bounce testing 2062.50 was high enough to trigger a short-squeeze, but didn”t last long enough, and the balance of the session ranged narrowly sideways back down to 2057.75.

Overnight action”s new info…
Rather than trigger a short-squeeze, Monday”s late ranging had formed a Complex Descending Triangle. Its minimum objective at 2051.50 was eventually met before Europe”s opens, amid wild swings in the Shanghai Composite. A fresh low at 2049.50 reacted up 6 points, and now 2051.50  is being retested.

If, then…
A characteristic of the Complex Triangle is that it can reverse back up abruptly from its target. If the 2051.50 target is not the low, then the pattern”s next target is 2046.00 with room for noise down to 2044.50. While the rubber band would be stretched pretty tight and a lot of selling pressure expended, extending that much lower would be extremely vulnerable to attracting new sponsorship for a deeper slide targeting 2022.25.

First Trade…
Exiting the open at 9:45 under 2050.00 would be likely also to exceed the 2051.50 bias-down target through 10:15 to renew the bias-down signal, next targeting 2044.50-2046.00. Exiting the open above 2059.50 would be unlikely to trigger the 2056.50 bias-down signal, putting into play an offsetting test of the 2065.50 bias-up signal.