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The First Trade – If, Then… Market Timing

The First Trade

By Rod David | December 12, 2014 - 7:59 am

Proper context can start the day with a solid win and make all the difference.

REMINDER: THE SITE WILL NOT BE UPDATED TODAY DUE TO TRAVEL.

BAD NEWS: THE CHARTROOM WILL NOT BE AVAILABLE DUE TO A TECHNICAL GLITCH. SUBSCRIBERS ARE ENCOURAGED TO “CHAT” AMONG EACH OTHER IN THE COMMENTS SECTION OF THIS POST. I”LL POST A QUICK MARKET TOUR THERE.

Through the prior close…
Sellers gained traction. Again. So had Wednesday afternoon”s sellers, but that didn”t prevent Thursday morning from rallying to 2049.50. A lot. It forced a complete retracement back to the 2026.26 open, probably exacerbated a little by the impending weekend”s illiquidity. The attempt to invalidate Wednesday”s trend change signal failed.

Overnight action”s new info…
Thursday”s retracement extended almost uninterrupted through the futures close, down to 2017.00. A 7-point bounce was retraced entirely, and then extended lower to 2015.25 and 2009.50. A bounce is now retesting 2017.00

If, then…
Two consecutive afternoons of sellers gaining traction. That”s distribution, and it suggests price is extending down. The wide intraday swings suggests the down move won”t be modest. The swings also keep the market vulnerable to intraday reversals. The confirmed trend change signal suggests the door is open to the weekend”s impending illiquidity encouraging much more selling — 2001.00 wouldn”t be surprising intraday if the open still hasn”t begun trending back up.

First Trade…
Exiting the open at 9:45 above 2022.00 would be unlikely to trigger the 2018.75 bias-down signal at 10:15. Exiting the open under 2012.25 would be likely to renew the bias-down signal by not recovering the 2013.25 bias-down target through 10:15, No preliminary level is currently visible that would make the bias-up signal any likelier to trigger.

Posted in S&P, The First Trade