The First Trade & Pre-open Tour Recording… When is a range not a range?

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…
Breaking out from a sideways overnight range tends to be retraced, when the breakout occurs 60-90 minutes before the open. Monday night’s 2908.50-2914.00 range broke higher during that window, but it self-corrected pre-open. This allowed a post-open rally to extend. Which it did, fulfilling its 2926.50-2928.00 objective before the bias environment began lapsing. And then extending to attack 2940.00 into the noon hour. Despite triggering the afternoon’s bias-up, there was no momentum either way. The balance of the session ranged narrowly sideways between 2934.50-2938.00. The 2942.75 bias-up target becomes “unfinished business,” and the session qualifies as a breaking still needing a second consecutive higher close Wednesday to confirm.

Overnight action’s new info…
Two wrongs don’t make a right, and two ranges don’t make a single range, despite being contained within a prior range. Like yesterday afternoon’s narrow sideways range, which has contained last night’s price action. But last night’s price action can be segmented into at least two ranges. First, the ranging narrowed for a couple of hours, hovering in a 2-point range and still attacking 2940.00. Trending down into midnight then entered another narrow 2-point range testing 2932.00, but at the lower-end of Tuesday afternoon’s range. Its retest after Europe’s opens launched a recovery that is now attacking the range’s upper-end.

If, then… (notes to accompany the Tour recording)
S&Ps are now attacking prior highs. The underlying cash index came within 4-5 points of its ~2841 Sep 21 high. Futures then were trading at a 5-6 point premium, now equivalent to 2646.00-2647.00, and the current equivalent is 2844.00. While those are likely to influence price action if tested, there’s no reason for the market to have come this close to the highs without ultimately probing higher. But the path there is never assured, especially when ranging develops just short of resistance. Regardless, this is “ineffectual pessimism” that is potentially bullish from a contrarian perspective. We’ll apply setups derived from the opening print and bias parameters to help determine likely resolutions.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2929.00 would be likely to trigger this morning’s 2933.25 bias-down signal. Exiting the open above 2936.75 would be unlikely to trigger bias-down. Exiting the open under 2937.50 would be unlikely to trigger the 2942.00 bias-up signal.