The First Trade… There’s that bounce.

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…
Sunday night had gapped down to 2014.00 and Monday’s open was even lower at 2011.00. Thursday night’s limit-down at 1999.00 was soon tested on the way down to 1981.50, taking RSIs oversold. A 15-point bounce was retraced to retest the low’s oversold RSIs, neutralizing the attraction below. Meanwhile, sellers didn’t gain traction for the effort.

Overnight action’s new info…
Bouncing at the Globex open extended back up to and through Monday afternoon’s 1996.50 high, and higher to 2006.00. It’s consolidation down to 2000.00 resolved up momentarily to 2008.75, still fluctuating choppily around 2006.00.

If, then…
Yesterday afternoon’s bias-up held instead of triggering, so potential up to 2003.50 was never tested. The retest of yesterday’s 2001.50 low has been more successful, probing the target overnight by up to 5 points. Regardless of its timing or overlap, that was always likely to be only a temporary corrective leg. Friday’s trend change signal was confirmed Monday, so a corrective bounce is not unusual before at least one more lower close fulfills the signal’s minimum requirement. Retesting yesterday’s low remains likely, whether to start forming a more durable bottom, or on the way toward oblivion. Gapping up will create a gap back down to yesterday’s close needing to be filled eventually. And trending up relentlessly overnight is vulnerable to being reversed at the open.

First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2006.75 would be likely also to exceed the 2003.50 bias-up target at 10:15 to renew the bias-up signal. Exiting the open above 2001.50 would be likely to trigger the 1997.25 bias-up signal at 10:15.