The First Trade & Pre-open Tour Recording… Caught flat-footed.
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…
Tuesday’s open held tests of its 2789.75 bias-up signal as support, and soon extended higher until testing the morning’s 2797.50 bias-up target. Reacting down through the noon hour retested the morning’s low, and reversing up into the close retested the morning’s high. The final hour was entered too low to gain traction for the afternoon recovery. So, trending up further would be unlikely, and trending up anyway would be likely to fail. The close trended up anyway. The identical open and close — not in price, but by their legs covering the same ground — is inertia. And inertia at the new extreme of a multi-session trend suggests that sponsorship needs a pullback.
Overnight action’s new info…
Did I say pullback? I meant plunge, of course. New tariffs on China released soon after the Globex open triggered a 17-point plunge to 2780.50. Drifting down to 2773.00 formed a Descending Triangle that resolved down to 2765.75. That was Friday afternoon’s high, and its touch produced a bounce back up to 2781.00. A big bounce, which produced a big reaction down to 2769.50. Now a bounce is attacking 2779.00.
If, then…
Was last night’s tariff reaction an overreaction? Buying pressure was freshly satisfied at Tuesday morning’s bias-up target, and no higher target was since triggered. More so, price action since fulfilling yesterday morning’s target only ranged sideways — and even tried to rally when it would not gain traction for the effort. Just revisiting 2788.00 was already likely to trigger substantial follow-through, which there has been. There’s certainly potential for even more substantial follow-through, like to 2761.00-2762.00, and bouncing first to 2784.00-2785.00 would likely be only a correction. But the degree of follow-through already done does introduce vulnerability to that corrective bounce, first. Holding the corrective bounce’s recovery through a relevant window would start to suggest the reaction down was done.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2780.25 would be likely also not to recover the 2782.00 bias-down target at 10:15, renewing the bias-down signal. Exiting the open above 2784.00 would be likely at least to trigger the 2789.75 bias-down signal at 10:15.