The First Trade… More sellers, more knife catchers.

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

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(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
However Wednesday”s opening test of the prior afternoon”s 2090.75 high were to resolve, it would determine whether Tuesday afternoon”s sellers would be trapped. They had gained traction, and invalidating them would have triggered a squeeze. But the open”s blip-up pierced the 2092.75-2093.50 preliminary resistance and quickly reversed down sharply — plunging, actually, to 2070.50 which was the morning”s low. Bouncing to 2083.75 failed to invalidate a lower target, which was met during the afternoon bias environment”s slide to 2061.25. The last 60-90 minutes recovered the morning”s low up to 2075.00.

Overnight action”s new info…
Choppy sideways ranging touched as high as 2077.50 after midnight. A 10-point drop to 2067.50 into Europe”s opens was consolidated, but ultimately resolved down another 10 points  to 2057.00. Similar to yesterday, that has bounced to test the overnight drop”s initial low up to 2070.00.

If, then…
Did sellers overplay their hand overnight? Yesterday”s decline didn”t gain traction (because only its 2:30 bias environment exit was bearish). That”s not necessarily bullish, and anyway, the low”s buyers were rewarded fully already — the late bounce that completed a 61.8% retracement of the mid-day downleg. The overnight slide”s threat to resume the decline seems to have lacked sponsorship, since it has bounced 13 points, and well back above yesterday”s lows. Nevertheless, the bounce is just touching what is now resistance at this morning”s 2070.00 bias-down signal. Not recovering it through the open can be as bearish as yesterday”s failed opening test of its bias-up signal”s resistance.

First Trade…
Exiting the open at 9:45 above 2072.25-2073.00 would be unlikely to trigger the 2070.00 bias-down signal 30 minutes later at 10:15. Exiting the open under 2066.50 would be likely to trigger bias-down.