The First Trade… 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…
New recovery highs had been probed already to 1994.00 before Thursday’s FOMC policy statement and Yellen’s Q&A start produced surges to 2000.00 and 2011.75. Yellen’s Q&A start was surrounded by two reactions down to 1976.00, which was being tested into the close. A post-close blip-down extended to 2072.00. Meanwhile, afternoon buyers had gained traction for their efforts by exiting the bias environment at 2:30 above the noon hour’s range and entering the final hour above the bias environment’s range — because of the unusual news flow at the time, and regardless of its subsequent price action.

Overnight action’s new info…
That subsequent price action has resumed. Initially, a retest of 1972.00 had reacted up to 1983.00, and ranged narrowly for awhile supported by 1976.50. That range gave way 2-1/2 hours ago to what has become a 22-point slide testing 1954.50.

If, then…
I had noted during yesterday’s post-market Wrap the room for only a pullback to “lower prior highs” around 1950.00-1955.00. Gapping down to support prevents attracting new sponsorship along the way down. The trick is not to gap down so far that expiration strategies are triggered to reverse direction in the same way the week’s earlier rally became a perpetual motion machine pointed higher. This is either done by holding a retest of support, or signaled by already recovering high enough into the open. Opening back above the 1956.75-1961.25 “running correction” we had monitored during Wednesday’s rally would suggest the latter. Opening under 1952.75 would dash the former. Meanwhile, this being expiration, trending through the opening 15 minutes would be predictive. And this being expiration, regardless of the opening action, trending at all can get carried away in either direction.

First Trade…
Exiting the open at 9:45 above 1961.25 and 1964.50 would be increasingly likely also to recover this morning’s 1965.00 bias-down target in time to avoid renewing the bias-down signal at 10:15. Exiting the open under 1956.75-1957.50 would be much less likely to recover the bias-down target.