The First Trade… Does yesterday afternoon have legs?

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

CHARTROOM LINK(s)
o Win XP-Friendly entry
o non-xp friendly (ilinc)
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
Tuesday’s gap down held its 1998.00 limit to signal that overnight selling was not bleeding into the cash session. The consequence was to reject both bias-down parameters and put into play both bias-up parameters. The 2016.00 bias-up target was only attacked to within 5 ticks, but it did not become “unfinished business above” since the bias environment was exited back under its 2011.00 bias-up signal. The balance of the session trended back down to fresh lows at 1993.50 support. Potential for extending down to 1988.00 created a compelling hold-short setup.

Overnight action’s new info…
The 1988.00 attraction was soon attacked to within 6 ticks. A 7-point range since then has been centered around 1993.50, which is being overlapped now.

If, then…
The hold-short for 1988.00 was considered within the context of its test being likely to react up overnight. Not already testing it and reacting up does create room for a lower test, whether by 1 point or by 2-1/2. The setup’s template for a pre-open recovery would still be possible — but keeping to the timetable would require a steeper recovery. Not yet probing fresh overnight lows before opening positive would be more likely to reverse back down.

First Trade…
Exiting the open at 9:45 above 1993.50 would be unlikely to trigger the 1988.00 bias-down signal at 10:15. Exiting the open under 1987.00 would be likely to trigger bias-down. Exiting the open above2004.00 would be likely to trigger the 2001.50 bias-up signal.