The First Trade… That’s going to leave a mark.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Sharply higher overnight highs at 2102.00 were retraced through Thursday’s open down to 2089.75. That was the morning’s bias-up target, and touching it as support launched an up leg that fulfilled its 2099.50 target. Shallow ranging through the afternoon waited until the last half-hour before resolving up from 2098.00, rallying sharply again to fulfill its 2106.00 target. No traction was gained for the effort.
Overnight action’s new info…
Thursday’s late surge wasted no time extending even higher, already extending to 2113.25 before the Globex open, and just as quickly extending to 2119.50 after it. And that was the end of that. Results began arriving, quite different from the intraday and post-close optimism — a narrow win for Remain that should have been wide, a win for Brexit that was wider than anticipated. The first drop was technical, bouncing from 2104.50. The next drop plunged to Thursday morning’s 2089.75 low. One more plunge touched 2050.00. Its 40-point bounce back up to 2089.75 was reversed entirely, too, and kept reversing. Last week’s ~2041.00 low was ignored on the way down to 2025.00, and then to limit-down at 1999.00. Now a bounce up to 2043.50 has retraced 61.8% down to 2016.00.
If, then…
Long night. In some ways, it has seemed like a reunion. The above overnight re-cap lists so many levels that were so pivotal during the rally that is now being retraced. So, is this a correction? There’s no “unfinished business above,” since 2115.00 was met, by a singular non-complex probe which doesn’t qualify as a “new Globex trend extreme.” Is the trend reversing down into a bear market? Duplicating last night intraday would not be recovered for a very long time, and Friday Factors could facilitate that move. Remember that gapping from one end of a range to the other tends to react instead of extending, so this may be only the lower-end of a trading range. That principle certainly will be put to a test today, as the range’s lower-end is being approached at 1993.50, with potential to 1980.00. Bouncing first to 1950.50-1955.50 would be too much optimism, too soon to be sustained..
First Trade…
[Click here to view the Bias parameters] No preliminary levels apply (the understatement of the year)..