The First Trade & Pre-open Tour Recording… Uh-oh, another rally retraced.
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…
Despite Wednesday’s unusual probe under the prior session’s 2829.00 low — unusual, for developing ahead of the afternoon FOMC events — the session was an awesome display of the If-Then analysis’ utility. The FOMC day context told us that extending so low as to attack 2817.00 from Tuesday’s 2841.00 close was weak-handed all the way. And that told us the overly-discounted FOMC news was almost impossible not to react favorably. In fact, the policy statement was greeted at 2825.25, already long from 2822.00 after a failed long-entry at 2825.25, and its reaction surged to 2842.50 and 2849.00. Then the no-bias environment context told us that everything above the 2828.75 bias-up signal was “no-bias trending” requiring retracement. In fact, it was retraced entirely before the position-squaring window opened, and retested into the close. Which also fulfilled the bigger picture context of the recent distributive pattern I began highlighting Monday, producing its third consecutive failed intraday rally.
Overnight action’s new info…
No-bias trending can also be attracted to retracing its 1:20 print. That was essentially 2823.25, and it was met before the Globex open. Its test reacted up from 2822.75 to pierce this morning’s 2835.50 bias-up signal, and then retraced entirely through Europe’s opens to eventually attack 2820.00. Now a bounce to yesterday’s 2827.00 futures close has collapsed to fresh lows testing 2819.00.
If, then… (notes to accompany the Tour recording)
The ongoing pattern of retracing intraday rallies just retraced its third. It was both the biggest retracement AND from the lowest levels. Now an overnight rally — not an arbitrary bounce, but a bounce up to this morning’s bias-up signal — has been retraced already. Yesterday’s intraday rally makes it seem that buyers are strong and willing. But that was a function of the deeply oversold condition that greeted the rally’s FOMC catalyst. More important is the intraday rally’s complete reversal, and now immediately following it comes last night’s reversal. All of which makes it seem that strong-handed sellers are losing patience waiting for rallies to sell. Not recovering yesterday’s highs today, let alone trending down to fresh lows, could keep the market on defense into and out of the weekend.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2818.75 would be likely to trigger the 2823.50 bias-down signal at 10:15. Exiting the open above 2825.25 would be unlikely to trigger bias-down. Exiting the open under 2830.75 would be unlikely to trigger the 2835.50 bias-up signal.