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The First Trade… That old chestnut. – If, Then… Market Timing

The First Trade… That old chestnut.

By Rod David | September 15, 2015 - 7:01 am | 2

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…
Holiday-inhibited volume didn’t help to defend Sunday night’s rally to 1964.75 from being retraced entirely before Monday’s open, or from being reversed into Friday afternoon’s range after the open. But the open quickly fulfilled and held its 1938.00-1939.00 potential. Then the holiday-inhibited volume prevented attracting sponsorship for more than a temporary bounce or to attacking 1945.00.

Overnight action’s new info…
Overnight action didn’t initially seem inhibited, firming to 1949.50. But that was retraced back into negative territory, back under Monday’s lows, and deeper into Friday afternoon’s range back down to 1935.25. But an accumulation pattern centered around 1938.00-1939.00 has broken higher, surging to 1946.50.

If, then…
I was looking forward to yet another bite at the 1938.00-1939.00 apple. Its support has held for several sessions, and now again overnight. And the reactions there are more reflective of accumulation than of chipping away at support. Not that this morning’s action will resume trending, with participation still a little thinner. And yesterday’s buyers didn’t gain traction. So, gapping up only to test yesterday’s highs without exceeding them could spend the balance of the morning backing-and-filling back into yesterday’s range. So long as its lows hold, the week’s biggest rally leg can develop.

First Trade…
Exiting the open at 9:45 under 1938.00 would be likely at least to test this morning’s 1935.50 bias-down signal. Exiting the open above 1943.50 would be unlikely to test bias-down.

Posted in S&P, The First Trade

2 Comments

  1. Steve Marriott on September 15, 2015 - 9:15 am at 9:15 am

    “…are more reflective of accumulation than of chipping away at support.”
    I’m very intrigued by this comment. When price is at a support level, what are the distinguishing characteristics that suggest accumulative activity, rather than erosion of support?



    • Rod David on September 15, 2015 - 1:53 pm at 1:53 pm

      There are several methods that support (or resistance) can be chipped away, or else be accumulation (or distribution). But they’re generally just different versions of isolating the probe of a relevant level to an irrelevant timing window.