Day Trading Signals and Strategy - 04-06-2015

NOTE: THE FOLLOWING PARAMETERS REPLACE THE EARLIER POST THAT WAS CALCULATED FROM THURSDAY''S CLOSING PRICES.

MON morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2055.75
2048.00
...would target 2063.00
2054.50
Bias-down: under 2046.50
2039.00
...would target 2041.50
2033.75
Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED FAQ INTRO VIDEOS #1 and #2

1. At 10:15, trading above the bias-up signal or under the bias-down signal would put into play a test of its bias-up or bias-down target.
2. Not triggering either bias signal at 10:15 would be "no-bias," and the bias signals should define the bias environment''s range.
-- A test of the opposite bias signal would be targeted if one bias signal was tested before triggering no-bias.
3. Touching the bias signal within 3 minutes either way of 10:15 would invoke a grace period through 10:30 to trigger a late signal.
-- "Late" signals don''t require testing the opposite bias signal, but it''s still likely.
4. Still testing the bias signal at 10:30 after invoking the grace period would trigger "noN-bias," with no bias influence.

Proper context can start the day with a solid win and make all the difference.

Enter the Chartroom here
(pre-open Market Tour begins at 8:55 ET)

Through the prior close...
Thursday''s session had tested 2063.00-2064.00 resistance early, holding there through the close while awaiting Friday morning''s Employment Situation report. It was a big miss, driving stocks down sharply with an early close just minutes away. Not that that the reaction wasn''t justified, as the Dollar fell sharply, too. But the impending illiquidity could only exacerbate matters. And oversold RSIs at Wednesday''s post-open low had required its retest, to at least 2039.00, which held Friday''s Globex close.

Overnight action''s new info...
Sunday night''s open surged to attack 2047.00. A dip back to 2039.00 was recovered to attack 2048.00. All of which is too shallow to suggest that Friday''s drop was just an anomaly. Relatively narrow ranging since then between 2043.00-2047.00 is now getting choppier -- the past hour has surged to the range''s upper-end, and back down to its lower-end.

If, then...
Despite Friday''s plunge, gapping down Monday from Thursday''s close is extreme sentiment, and vulnerable to being a sentiment extreme. Opening under 2048.00 won''t be impossible to recover later, just difficult. That''s the bias-up signal, and recovering its 2054.50 bias-up target would be the earliest suggestion that Friday''s plunge was only temporary. And ended. Recovering from under Friday''s low would be possible, too, but less so if not already recovering into the bias environment''s exit.

First Trade...
Exiting the open at 9:45 under 2037.50 would be likely also to trigger the 2039.00 bias-down signal at 10:15. Exiting the open above 2053.00 would be likely to trigger the 2048.00 bias-up signal.

Pre-open firming leads to post-open surge.

The overnight range was on-track to produce a post-open dip. And then cam new info.

As described in the pre-open Alert, last-minute firming probed above 2048.00. That created a new requirement -- extending higher immediately, or else not dipping back under 2047.00, could marginalize sellers.

And the open surged. It recovered 2050.50 and 2053.00 through 9:45 and kept rallying. Its first real hesitation was at 2062.00. That resolved up to 2072.50 at 10:30.

Bias parameters that I calculated after Thursday''s close put the bias-up target at 2070.50. It''s being tested now. It would have been as the reward for rejecting tests of both bias-down parameters, 2048.00 and 2054.50. 

3-minute RSI has been persistently overbought throughout. It was joined by 1-minute RSI to require a retest of the high. That will be helpful information, if there''s a reaction down.

This test of 2070.50 would be an appropriate spot for a temporary corrective dip (so was 2068.00, 2060.00, and 2053.00). Back under 2068.25 would target 2061.75.

Pullback first, or not, just returning to last Tuesday''s Symmetrical Triangle suggests this leg will rally more substantially than the intervening leg dropped. That is, unless a corrective dip were to close back under 2060.00.

MON afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2084.75
2077.50
...would target 2089.75
2082.50
Bias-down: under 2073.25
2066.00
...would target 2068.25
2061.00
Signal status: LATE BIAS-UP FAQ INTRO VIDEOS #1 and #2

1. At 1:20, trading above the bias-up signal or under the bias-down signal would put into play a test of its bias-up or bias-down target.
2. Not triggering either bias signal at 1:20 would be "no-bias," and the bias signals should define the bias environment''s range.
-- A test of the opposite bias signal would be targeted if one bias signal was tested before triggering no-bias.
3. Touching the bias signal within 3 minutes either way of 1:20 would invoke a grace period through 1:30 to trigger a late signal.
-- "Late" signals don''t require testing the opposite bias signal, but it''s still likely.
4. Still testing the bias signal at 1:30 after invoking the grace period would trigger "noN-bias," with no bias influence.

A daily summary of high-profile members of several complexes... View a more detailed discussion of each chart at the end of today''s Market Wrap.

Eurodollar Mar Contract (EC, ETF: (FXE, UUP))
Monday didn''t reject Friday''s spike up in reaction to the Employment Situation report. It eventually probed higher to test 1.0145. The probe above 1.0900 wasn''t rejected, so resuming the decline without first extending the rally substantially would all but require closing back under 1.0855 Tuesday.

Gold Jun Contract (GC, ETF: (GLD))
Sunday night''s rally already fulfilled the 1194.00 buy signal''s minimum objective by retesting last week''s overnight 1220.40 spike high. Holding 1213.00 support would maintain the rally''s momentum. Closing back under 1208.50 would signal momentum reversing down.

Silver May Contract (SI, ETF: (SLV))
Testing 17.20 Sunday night stopped short of touching last week''s overnight high before dipping back down for a gap up Monday to 17.05. A fresh high testing 17.30 was also retraced down to 17.05. The pullback can test 16.80-16.90 and still be likely to resume the rally.

30-year Treasury Jun Contract (US, ETF: (TLT))
Overnight highs up to 165-26 gapped up Monday and almost immediately began trending back down to fresh lows that tested 163-16.  Extending under 163-08 would next target 162-12 and then lower.

Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fresh recovery highs Sunday night attacked 51.00. Higher highs intraday Monday attacked 52.25, just short of the minimum objective of retesting the recent overnight highs up to 52.50.

Natural Gas May Contract (NG, ETF: (UNG, UNL))
Friday''s surge through the 2.64 buy signal was retraced entirely to that inflection point before Monday''s open. The session ranged sideways without extending the gap down or recovering it. Now a gap above is outstanding that can attract price higher for a more serious rally effort.

TUE morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2084.75
2077.50
...would target 2089.75
2082.50
Bias-down: under 2073.25
2066.00
...would target 2068.25
2061.00
Signal status: LATE BIAS-UP FAQ INTRO VIDEOS #1 and #2

1. At 10:15, trading above the bias-up signal or under the bias-down signal would put into play a test of its bias-up or bias-down target.
2. Not triggering either bias signal at 10:15 would be "no-bias," and the bias signals should define the bias environment''s range.
-- A test of the opposite bias signal would be targeted if one bias signal was tested before triggering no-bias.
3. Touching the bias signal within 3 minutes either way of 10:15 would invoke a grace period through 10:30 to trigger a late signal.
-- "Late" signals don''t require testing the opposite bias signal, but it''s still likely.
4. Still testing the bias signal at 10:30 after invoking the grace period would trigger "noN-bias," with no bias influence.