The First Trade… Pavlovian rally day.

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 was likely to be absorbed and reversed since Monday’s rally had gained traction. The balance of the morning trended back up through Monday’s high to fulfill the reward owed to Monday’s rally. The afternoon’s trended higher still. Its reaction down into the close held the noon hour’s range.

Overnight action’s new info…
Choppy sideways action has avoided negative territory. So far, it has formed an Ascending Triangle. As we discussed during the Wrap, rallying out of the prior two overnight pullbacks had likely conditioned the market not to allow another overnight pullback.

If, then…
Also discussed during the Wrap was the resulting vulnerability of being conditioned to buy impatiently. Tuesday’s high held a relevant target, satisfying a lot of buying pressure. No traction was gained for the rally’s efforts, so no further reward is owed it. New highs are in-play, entrenching the uptrend, which often allows the rally to rest. By the way, a lot of Fed speakers are scheduled today, and they’re probably not going to be whispering sweet nothings into the rally’s ear. Overbought RSIs at Tuesday’s high requiring an eventual retest might help to resume the rally Wednesday morning, but its attraction can be neutralized quickly.

First Trade…
Exiting the open at 9:45 above 2110.25 would be likely also to trigger the 2106.75 bias-up signal at 10:15. Exiting the open under 2101.50 would be unlikely to trigger bias-up.