The First Trade… Still up, but looking down.

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…
Like the overnight rally’s correction before it, Tuesday’s opening surge indicated that the session was breaking the pattern of its recent range. The surge to 2097.25 was reversed down 13 points, a shock to the system needing to be absorbed through the afternoon. That prevented the rally from gaining traction, but it didn’t prevent the final hour from resuming the rally to fresh highs at 2101.50.

Overnight action’s new info…
Hovering narrowly at Tuesday’s high suddenly spiked up to 2104.50. That hasn’t been extended during the 6 hours since then, as the ranging simply shifted higher. But it might be rejected, as Europe’s indexes are testing session lows. The initial range’s 2101.00 upper-end which has been support is now being pierced down to 2099.00.

If, then…
Yesterday’s action was bullish for extending the rally, but not necessarily for resuming it immediately. The late surge’s sponsorship was weak-handed since it originated after buyers had failed to gain traction. Gapping up is the only path to extending the rally without first correcting down — and probing fresh highs overnight doesn’t assure a gap up. This morning is likely to be spent probing back into yesterday’s range, rejecting any bounces. And there is no assurance of resuming the rally today, so there is no assurance of confirming yesterday’s breakout.

First Trade…
Exiting the open at 9:45 under 2098.50 would be unlikely to trigger this morning’s 2103.00 bias-up signal at 10:15. Exiting the open under 2092.50 would be likely to trigger the 2095.50 bias-down signal.