The First Trade… Draining the batteries.
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 afternoon”s “no-bias trending” above the 2098.25 bias-up signal could have been dismissed if buyers had gained traction for the effort. But exiting the bias environment at 2101.50 above the noon hour”s 2098.50 high didn”t attract strong-handed sponsorship. An eventual fresh high attacked 2104.00, but only after the 3:10-3:20 window that would otherwise have extended higher. Instead, it reacted down toward the 2098.25 bias-up signal that had been broken prematurely.
Overnight action”s new info…
Even then, Wednesday”s 2098.25 bias-up signal didn”t require being retraced, since it had not held decisively when it mattered most. But it was soon tested overnight anyway, touching Wednesday morning”s 2097.25 highs. Then the bottom dropped out — again — sliding through Europe”s opens to 2087.50. Its recovery up to 2098.00 has dipped back down to 2093.00-2095.00.
If, then…
Another day, another overnight plunge. So… Another overnight plunge, another intraday recovery? As I detailed during yesterday”s post-market Wrap, that which hasn”t killed the market doesn”t necessarily make it stronger, but it does earn an obligatory probe above the range. This reward for having absorbed so much selling pressure assumes that selling pressure hasn”t first chipped away entirely at support. Either down here, or up there, buyers will find none others remain to be attracted. The obligatory reward for buyers does have a shelf-life, which is less like an expiration date, and more like a battery”s charge. Potential to new highs remains alive so long as the charge”s reading holds above 2090-2095 through every relevant timing window. It”s being challenged again now, and GM and MMM just missed earnings expectations.
First Trade…
Exiting the open at 9:45 above 2097.50-2098.25 would be unlikely to trigger this morning”s 2095.25 bias-down signal at 10:15. Exiting the open under 2090.00 would likely trigger bias-down. Exiting the open under 2088.00 would become unlikely to recover the 2089.50 bias-down target at 10:15, which would renew the bias-down signal.