The First Trade… Stretching the rubber band.

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…
Volatility was inhibited Monday by the Columbus Day holiday, which maintained the ongoing ranging around 2006.00-2007.00. But the only attractions were higher, and no sell signals formed. The afternoon had repeatedly peaked at 3 ticks above its 2007.00 resistance. Firming during the final hour eventual surged through the Globex open to touch Friday’s 2014.00 pre-open high.

Overnight action’s new info…
That late surge was in reaction to dovish Fed comments, and eventually retraced entirely back down to 2006.00-2007.00. Europe’s opens triggered a slide testing 1997.00. A consolidation there has broken higher, now testing 2004.25.

If, then…
Thursday afternoon’s bias environment had been resisted up to 1997.00. That’s where the bias environment’s exit triggered a breakout during its late surge that attacked 2009.00. So, 2009.00 is the likely reward for the 1997.00 area holding a test as support. Conducting the test overnight can dilute the reward, but it does represent more sellers having been satisfied. And any sell-off attempt recovered through a relevant timing window can have the effect of a stretched rubber band snapping back up. But that probably depends also on not triggering bias-down this morning.

First Trade…
Exiting the open at 9:45 above 2007.00 would be unlikely to trigger the 2004.25 bias-down signal at 10:15. Exiting the open under 2001.00 would be likelier to trigger bias-down. Exiting the open under 1998.00 would be likely also to exceed the 1999.50 bias-down target at 10:15 to renew the bias-down signal.