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...
After bouncing from an overnight slide, Tuesday's open was flat with Monday's
1936.50 futures close. The slide resumed anyway, to
1919.00 in the morning and then much later down to
1916.00. Not too late for 7-1/2 point bounce, or for the futures close to retrace it all back down to
1916.00.
Overnight action's new info...
Tuesday's late drop extended down immediately to range narrowly around
1914.00. Bouncing 4-1/2 points resolved down to attack
1909.00. Bouncing 11 points to a fresh high was also temporary until Europe's opens. Its reversal has extended sharply lower to
1896.00.
If, then...
Monday's high left outstanding overbought RSIs requiring a retest at
1944.00. The gap back up to its
1942.00 cash session closing equivalent is an attraction, too. An opportunity gap down irrecoverably Tuesday was rejected. So, the subsequent downleg's context is of a temporary correction. Testing "lower prior highs" as support is not unusual before recovering. Problem:
1914.00 was the lowest lower prior high with potential to be tested, and likely to launch the high's retest. But the overnight action has fallen well under it. The extreme sentiment of relentless overnight trending is often a sentiment extreme that reverses direction at the open. The window for that isn't very wide, and not very forgiving -- extending down post-open could double the overnight slide by noon.
First Trade...
Exiting the open at 9:45 above
1905.00 would also likely recover the
1908.00 bias-down target by 10:15 to avoid renewing the bias-down signal. Exiting the open under
1901.00 would be likely to extend down to
1890.00.