The First Trade… Turkey shoots down a Russian jet, and a rally.
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)
[Thanks to all who helped test the new room last night ! ]
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Flat-to-higher up to 2093.00 Monday morning didn’t extend the bearish WedEX influence. But an offsetting test of the morning’s 2082.50 bias-down signal was put into play. That applied also to the afternoon, which plunged to 2081.25 during it no-bias environment. A retracement back to the 2088.00 bias-down signal became “unfinished business above.”
Overnight action’s new info…
Bouncing to within 3 ticks of 2088.00 neutralized its attraction. Coinciding within minutes was news of a Turkish missile coinciding with a Russian jet fighter. Both were direct hits, triggering a 1-hour, 20-point plunge down to 2066.50. The last 61.8% dropped at an exponential pace from 2079.00, and has been retraced. Price action since then has ranged choppily sideways down to 2073.00.
If, then…
Was reaction to the Russian jet downing exacerbated by coinciding with two other influences? First, the market had become vulnerable already to a correction. Last week’s test of 2068.00 up to the 2082.50 prior high had opened the door to a correction. This weekend’s Saturday Review described the pre-holiday window where a correction must occur if it were going to occur at all. And yesterday’s post-market Wrap described the four consecutive sessions of probing above 2082.50 that never actually broke its resistance. Also exacerbating the market’s reaction was the news coinciding with Europe’s opens. That was a direct hit. But even if the overnight drop was exacerbated, immediately reversing the direction back up isn’t assured. Remember that bullish holiday seasonality doesn’t begin before this afternoon. Although the 2065.50 overnight low need not be retested before resuming the rally, its gravitational pull remains intact until recovering back above yesterday’s lows.
First Trade…
Exiting the open at 9:45 above 2082.50 would be unlikely to trigger the 2080.50 bias-down signal at 10:15. Exiting the open under 2077.75 would be likely to trigger the 2080.50 bias-down signal. Exiting the open under 2070.50 would be likely also not to recover the 2074.75 bias-down target by 10:15 and renew the bias-down signal.