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The First Trade… Treading shark-infested waters. – If, Then… Market Timing

The First Trade… Treading shark-infested waters.

By Rod David | July 24, 2015 - 7:26 am

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…
Thursday morning”s rally neutralized it upside attraction by attacking 2111.00 to within 3 ticks. Without attracting new sponsorship, perhaps inhibited by Turkey firing on Syria, the recovery attempt was undone by a slide to 2095.00 into the noon hour. Similarly, a bounce to 2101.00 was reversed to fresh lows at 2091.50. Its reaction closed back at the noon hour”s low.

Overnight action”s new info…
Futures extended the last-minute recovery to settle at 2099.25. Flat-to-lower ranging began resolving up after Europe”s opens, extending to 2104.00.

If, then…
Closing under 2099.25 puts into play much lower objectives at 2077.00. That close is being challenged overnight, and has yet to be confirmed by a second consecutive lower close. It can still be rejected to foreclose upon the downside, and triggering a significant rally for having expended more selling pressure than is sustainable. Despite the decline having been so productive, its sponsorship by weak-hands is suggested by its impatience, with unfinished business left outstanding above. Even the strongest rally can be blind-sided and overwhelmed by surprises (it”s never “peace suddenly breaking out”). But the weekend”s impending illiquidity has a way of focusing the market on how firmly it believes earnings growth may be at risk. So, with buyers not gaining traction yesterday, gapping up sufficiently this morning is probably the only way to avoid extending the decline. By the same token, maintaining a sufficient gap up — or, at least, extending sufficiently higher through the open — should hardly look back before extending sharply higher this morning.

First Trade…
Exiting the open at 9:45 above 2105.50 would be likely to trigger the 2104.00 bias-up signal at 10:15. Exiting the open under 2099.25 would be unlikely to trigger bias-up.

Posted in S&P, The First Trade