The First Trade & Pre-open Tour Recording… Big gap up.

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

DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close…
Thursday night’s dip was contained well within the intraday range, but still capable of derailing the rally. A pre-open surge avoided opening too low, and avoided confirming that Thursday’s late dip back under Wednesday’s high had gained traction. The minimum reward or consequence to retest Thursday’s high was done Friday afternoon, following two no-bias environments that could hardly wait until lapsing to probe their bias-up signals. The behavior wasn’t overly optimistic as to be bearish from a contrarian perspective, and suggested the rally is credible for extending higher. Closing above Thursday’s high put into play the next higher objective at 2768.00-2770.00, and extending higher post-close came within almost 3 points.

Overnight action’s new info…
Weekend developments from the G20 included a Trump-China trade truce, or at least a cease fire. That’s the highest-profile among other slightly less prominent developments elsewhere globally that have replaced recent and near-term unknowns with predictability. Sunday night’s 2793.50 Globex open gapped up nearly 30 points — 37 points from Friday’s cash session close equivalent —  and extended to almost 2810.00. Natural resistance there from a 3-week old gap at prior highs initially held. Its pullback to 2798.00 was recovered by fresh highs up to 2814.00 into Europe’s opens. That was brief, as another dip is back under earlier highs testing 2795.50.

If, then… (notes to accompany the Tour recording)
Suddenly, the recovery we’ve been weighing has become obvious to all. And as suddenly, its correction back down comes to the forefront. Having established higher targets at Friday’s close and entrenching the rally, there was already vulnerability to dipping Monday morning. Weekend developments may be too recent to serve as a catalyst that attracts an influential degree of retail players. A post-open higher high can’t yet be discounted, but it wouldn’t tolerate much dissent before rolling over into a correction that lasts through Tuesday morning. And having probed the prior session’s high, a Globex-flip setup could form if the cash session’s open were maintained back under the 2798.00 earlier Globex low. The sad passing of President George H.W. Bush has introduced a closed session on Wednesday, which affects trading decisions and the market’s timing. Avoiding any bearish setups this morning — including the rejection of probing overnight highs — could form a short-squeeze up instead of correction fown.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2798.00 would have potential for testing this morning’s 2773.00 as support.