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The First Trade. – If, Then… Market Timing

The First Trade.

By Rod David | January 22, 2015 - 7:47 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…
Wednesday morning had recovered from gapping down to test 2005.25, and then trended back above Tuesday”s 2026.50 high to 2032.75 — rewarding Tuesday afternoon”s rally for having gained traction. With that obligation fulfilled, and with ECB news ahead of it, the morning”s optimism needed to be kept in-check. So, the balance of the session marked time, dipping to 2016.25 and then bouncing back up to 2028.25.

Overnight action”s new info…
Wednesday”s last bounce eventually extended higher to another fresh high at 2035.75. ECB news still lies ahead, so the optimism was kept in-check by dipping back down to test Wednesday”s 2028.25 late bounce high. That has bounced to retest yesterday”s 2032.75 high into the ECB interest rate news (but not yet the QE details).

If, then…
Yesterday”s price action behaved appropriately for a favorable reaction to this morning”s news, greeting it with retrained upward momentum. A favorable reaction could extend through multiple timing windows, but could. Regardless of whether it fails today, a favorable reaction should be very productive. A negative reaction should be both durable and productive.

First Trade…
I”ll update this following the QE details.

Posted in S&P, The First Trade