The First Trade… Rolling forward.

Proper context can start the day with a solid win and make all the difference.

CHARTROOM LINK(s)
o Win XP-Friendly entry
o non-xp friendly (ilinc)
(pre-open Market Tour begins at 8:55 ET)

Through the prior close…
Thursday’s volatility was legendary. Wednesday’s opening gap down to 2046.50 (basis Mar) quickly signaled a rally above 2049.25. The 2068.25 bias-up target was met and held at 10:15, and later extended momentarily to 2071.75. The rally was unlikely to hold because its origin was too shallow. But its 2065.00 sell signal was extremely productive, probing the open’s lows by noon, and extending down through the noon hour to test and retest 2027.00, 45 points off the morning’s high. A late bounce to 2042.75 was retraced back into the afternoon’s range under 2035.00.

Overnight action’s new info…
The late rally’s retracement was recovered and its 2042.75 high held as resistance into Europe’s opens. A probe of fresh highs up to 2046.75 never extended, and ranging around yesterday’s late high back down to 2038.50 is now breaking lower.

If, then…
Quarterly expiration is next Friday, so the front-month rolls forward at this morning’s open from December to March. Their spread is an 8 point discount, meaning that the pivotal 2048.00 basis Dec is now 2040.00 basis Mar. And the likely objective to retesting yesterday’s ~2027.00 lows is 2022.50. Any lower would target 2019.00 and 2014.00 — all so long as 2040.00 isn’t recovered, which could effectively end the decline.

First Trade…
Exiting the open at 9:45 above 2042.75 would be likely to trigger the 2040.75 bias-up signal at 10:15. Exiting the open under 2037.75 would be unlikely to trigger bias-up.