The First Trade & Pre-open Tour Recording… Lower-end, meet upper-end.
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…
Sunday night’s steady decline from 2728.00 to 2698.50 was retraced 38.2% before the open — not a healthier 68.2%. That much pessimism wasn’t going to trend down intraday unless maintained through the open. A quick probe under the overnight low could have formed a bottom, but an attack on it down to 2700.50 sufficed. The morning snapped back up to attack 2719.00, but from a position of weakness that was likely to retrace 2704.00. Which it did. Its retracement was likely to extend down. Which it didn’t. The balance of the session rallied back into positive territory up to 2728.50.
Overnight action’s new info…
Somewhat similar to Sunday, last night also essentially began with a blip-up that was reversed down. Last night’s blip-up was a little further in, initially surging 8 points to attack 2733.00, then snapping back down more than 11 points to attack 2721.00. Last night’s blip-up was also recovered, retraced into Europe’s opens, and extended to attack 2740.00 as Chinese banks actively supported the Yuan.
If, then…
Was anticipation that China would be forced to step in sooner rather than later responsible for Monday afternoon’s rescue? Or, the mid-week holiday’s volume constraints? Maybe a little of both, but more the latter than the former. In other words, China’s near-term effects on Global markets tend to be retraced. Meanwhile, trending beyond the existing range is difficult around holidays, while trending back to the range’s opposite end is easier. And now, markets are at the recent range’s upper-end, freshly retraced from its lower-end. Trending up today, and not down, probably requires trending up early. Today’s early close only makes breaking beyond the range more difficult. Extending Monday afternoon’s rally intraday was always least likely, and no more likely just for having extended it overnight… Closing Friday under 2718.00 kept alive selling pressure through the weekend. Closing above it Monday would usually require rejecting it Tuesday, but normal requirements are less influential on a shortened session — let alone ahead of a holiday. Nevertheless, trending back down to 2704.00 is still the likeliest objective for any reversal. REMINDER: Today’s early close is at 1:15 PM ET early close. Market Wrap will be held early.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2735.50 would be likely to exceed the 2735.50 bias-up target at 10:15 to renew the bias-up signal, next targeting 2740.75 and 2745.00. Exiting the open above 2733.00 would be likely to trigger the 2730.50 bias-up signal.