The First Trade & Pre-open Tour Recording… Will the market hit snooze?
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…
Friday’s 2765.00 open was 10 points above Thursday’s high. But that was modest compared to being 35 points above the overnight low, having rallied relentlessly since Europe’s opens. The balance of the session was a choppy 10-point range between 2763.00-2773.00, until the position-squaring window surged to 2777.50 through expiration. WedEX had no bearish influence, so it’s not required to have a bearish influence Tuesday morning unless the open were to gap down deeply enough. Meanwhile, closing above 2757.00 and 2751.00 suggests the rally since Christmas is more than a temporary bear market correction.
Overnight action’s new info…
Sunday night’s open spiked up 5 points to 2782.50. It reacted down almost immediately to begin a directionless range between 2773.00-2780.00 that persisted through all of Monday’s abbreviated session, and well past midnight. Then, as if an alarm clock sounded, the market seems to have awoken from its slumber. Trending was finally attempted soon after Europe’s opens, so far dipping down to 2766.75 (testing this morning’s bias-down signal) where RSIs have diverged positively. The break from an otherwise sideways range comes too early to ensure it’s false and any likelier to recover.
If, then… (notes to accompany the Tour recording)
Topping here need not immediately reverse the trend down noticeably, but it probably needs to stop rallying immediately. Friday’s underperformance by NDX and outperformance by the Dow makes a bigger rally leg from here suspect. Otherwise, historically a fresh trend extreme close on expiration like Friday is usually exceeded, and a fresh trend extreme close on Fridays usually requires an eventual higher close. Both could be considered anomalies by gapping down deeply enough to reinstate WedEX’s bearish influence. Not only triggering bias-down but also gapping under Wednesday’s 2762.00 prior highs to form an Island out of Friday’s range, if not also under 2757.00 and/or 2751.00 to reject Friday’s close above them and help to prevent a second consecutive confirming close. Meanwhile, trying to reject Friday’s bullish elements, but not, could be as bullish intraday as the rejection would have been bearish. Similarly, testing bias-down without triggering it would put into play a probe above Sunday night’s highs.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2766.25 would be likely to trigger the 2767.75 bias-down signal at 10:15. Exiting the open above 2772.75 would be unlikely to trigger bias-down.