The First Trade… Extended correction, or ended correction?
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…
Monday”s pre-open recovery probed fresh highs up to 2101.25. Bias-up triggered late at 10:30, but was never any more productive than before then. Through this small opening drove a giant truck that trended down relentlessly to the afternoon”s 2085.25 low. Perhaps the truck was only relatively giant, since demand was relatively small — the afternoon bias environment”s exit under the noon hour low wasn”t so much confirmed, as it was not rejected. Ultimately, Monday”s drop held (barely, 3 ticks) above Friday”s confirmation session low.
Overnight action”s new info…
Strong-handed selling, or not, it has extended overnight. But not before retracing all of yesterday”s final hour drop from 2092.75, into and out of Europe”s opens. The only proximate cause for its peak seems to be Asian markets” weakness. Regardless, a much steeper downleg began that fell over 13 points in 90 minutes to 2079.25. It has since bounced back above yesterday afternoon”s 2085.25 low to unchanged.
If, then…
Weak-handed sponsorship can be productive during less liquid environments. That”s why gapping open from one relevant level to the next is often reversed immediately intraday. Having tested the next lower objective at 2080.00, which is also support from last week”s “lower prior highs,” a corrective drop may be complete. Opening back above yesterday”s lows would be an important first step to ending the correction, but still not enough. A brief post-open dip that avoids triggering bias-down would be credible to building a bottom, a little more so than would immediately extending optimistically higher. And not recovering a post-open probe under yesterday”s low would likely retest the overnight low down to 2076.00.
First Trade…
Exiting the open at 9:45 under 2082.25 would be likely also to trigger the 2083.50 bias-down signal at 10:15. Exiting the open above 2089.50 would be unlikely to trigger bias-down. The opening 15 minutes must be exited above 2096.00 before improving the potential to trigger the 2091.50 bias-up 30 minutes later.