The First Trade & Pre-open Tour Recording… Delayed reaction.
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’s gap down to 2804.50 bounced 9 points but didn’t hold. Its retest bounced 11 points, and also didn’t hold. The second bounce filled the gap back up to Wednesday’s cash session close, neutralizing its attraction above. Failed bounces and gap fills are potentially distributive behavior, with that potential being unleashed by breaking under relevant support. And that was essentially 2804.50. Sellers were aided in this effort by having left “unfinished business” below at the morning’s 2800.75 bias-down target. The FOMC policy statement’s reaction helped sellers, too, and the next lower objective at 2795.50 was met. Sellers could also get help from not recovering the 2804.50 area, which a late bounce was still testing until a last-minute surge attacked 2811.00. Oversold RSIs at Thursday’s 2795.50 low require an eventual retest.
Overnight action’s new info…
Globex was initially choppy as Thursday’s last-minute surge to 2811.00 was retraced to within 1 tick of what is this morning’s 2799.50 bias-down signal. All of which was recovered by midnight back up to 2811.00, which is this morning’s bias-up signal. Reversing down since then retraced the bounce, and then consolidated for a couple of hours at Wednesday afternoon’s 2793.75 low. Its eventual break extended to fresh lows at 2789.50, which is now reacting up to test 2793.00, this morning’s bias-down target.
If, then… (notes to accompany the Tour recording)
Wednesday afternoon’s 2793.75 low never required being tested as support. Reversing the trend down from Wednesday’s huge rally would have been signaled quickly by opening Thursday under 2793.75. Closing under it Thursday would have qualified, too, if confirmed immediately today. Delaying its break until today is no longer qualified to signal the trend reversing down. It is now only relevant support that is capable of containing the current pullback from Wednesday’s high. But just as the 2793.75 didn’t require a test, its test isn’t required to hold. Its break could extend down to 2764.50 before suggesting a more substantial reversal may have begun. Holding a test of either 2793.75 or 2764.50 — for example, isolating this 2793.75 test to the overnight — wouldn’t ensure the current pullback has ended, but it would help. And the reward for ending the current pullback is at least a retest of Wednesday night’s 2818.00 highs, if not also resuming the rally to the 2850.00 area.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2802.00 would be unlikely to trigger the 2799.50 bias-down signal at 10:15. Exiting the open under 2795.50 would be likely to trigger bias-down.