The First Trade… Bloomberg down, world comes to an end (in that order)
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 night”s slide tested Tuesday”s “lower prior highs” into the 2088.00-2090.00 range. That was also the morning”s bias-down target. The 2095.00 bias-down signal was recovered at the open, but didn”t trigger either way at 10:15 or at 10:30. Nevertheless, the balance of the session worked higher until touching the morning”s 2104.75 bias-up signal during no-bias trending.
Overnight action”s new info…
A downward drift worked its way back into yesterday”s opening range. Narrowly consolidating at 2096.00-2098.00 suddenly broke lower into a 14-point plunge attacking 2082.00. The cause is tied to Bloomberg terminals going off-line globally. With everything being down from communication (i.e. chat) among trading desks to Central Bank activities (e.g. ECB QE buying), it might as well be a weekend. And with two days of illiquidity just hours away, exposure was reduced wholesale, and the selling drove prices down sharply.
If, then…
Yesterday”s no-bias rally was the sign of weak-handed buyers, like the opening range”s optimism that prevented a healthy blip-down before rallying. That kept alive potential for another dip today if the rally wasn”t extending. This vulnerability was leveraged by Bloomberg”s outage into an extra 6 points (attacking 2082.00 where 2088.00 would have sufficed). Without rebooting soon, there”s no assurance that another wave of selling won”t hit. Holding or recovering Tuesday”s 2088.00-2090.00 “lower prior highs” through the open is my line in the sand between rallying this morning, or extending down — either way, expiration is likely to exacerbate it. All else being equal, the underlying uptrend remains intact, with Bloomberg being the wild card.
First Trade…
Exiting the open at 9:45 under 2084.00 would be unlikely to recover the 2088.00 bias-down target through 10:15 and renew the bias-down signal. Exiting the open above 2090.00 would be likely to hold the bias-down target and not renew bias-down. Exiting the open above 2095.00 would be unlikely to trigger the 2093.25 bias-down signal.