Day Trading Signals and Strategy - 04-20-2016

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... Monday night's "new Globex trend extreme" at 2098.50 had reacted down into Tuesday's open, and then attacked to within 3 ticks at the morning's high. Its intraday retest remains outstanding. The noon hour's dip to 2085.00 in the same pattern we saw at Friday afternoon's low, giving us very early anticipation for a reaction target of 2095.50 that was met at the close. The rally failed to gain traction for its efforts. Overnight action's new info... With near-term buying pressure satisfied, the Globex open immediately began trending down. The reversal extended relentlessly into Europe's opens before bottoming at 2086.00. A recovery eventually began, and it is now probing yesterday's highs up to 2098.00. If, then... Having failed to gain traction for yesterday afternoon's efforts, the rally can extend higher this morning only by gapping up. Retracing all of the overnight drop is encouraging, and opening above the "new Globex trend extreme" at 2098.50 would be more promising. But in either case, the opening 15 minutes must still extend to higher maintain momentum. Otherwise, probing under yesterday's lows would not be surprising. First Trade... Exiting the open at 9:45 above 2098.50 would be likely to trigger the 2096.25 bias-up signal at 10:15. Exiting the open under 2093.75 would be unlikely to trigger bias-up.

Sorry for the confusion -- here's the correct chaRTroom link:

CHARTROOM LINK (pre-open Market Tour begins at 8:55 ET)

 

Overnight recovery attracts no new sponsorship. Last night's dip from 2095.50 down to 2085.75 had been recovered pre-open up to 2098.00. Its reaction down greeted the open at this morning's 2096.25 bias-up signal, and extended down to 2092.50. Two more bounces held 2096.25. Meanwhile, the bullish scenario's 2093.75 pullback limit held two tests, too. It's now being tested for a third time. It will probably break lower, since the bias-up signal is failing to trigger, putting into play an offsetting test of the 2088.25 bias-down signal. That may be the bullish scenario. Having failed to gap up and extend higher in this no-traction setup, probing fresh highs this morning would have been doomed to failure. Delaying fresh highs until late-afternoon would escape that restraint. By the same token, probing fresh highs anyway could form a more durable top here.

WED afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  2107.00 2101.00 ...would target  2113.25  2107.25 Bias-down: under  2100.25  2094.25 ...would target 2094.25  2088.25 Signal status: NO-BIAS 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.

No-bias objective is cut short by OPEC rumors. Repeatedly testing this morning's 2096.25 bias-up signal prevented it from triggering. That put into play an offsetting test of the 2088.25 bias-down signal. It was attacked down to 2089.50. The objective was attacked, and it likely would have been probed back down to and through yesterday's lows. But then the OPEC rumor hit, taking Crude higher and ES to fresh session highs at 2100.50. Unfortunately, I had no buy signal working, and other than violating the drop's bounce limit above 2091.25, I didn't participate in the surge.

Testing 2100.00-2101.00 at the open would have been bullish. Yesterday's buyers gained no traction, so resuming the rally before late-afternoon had to begin abruptly and aggressively. Delaying the test of 2100.00-2101.00 is not bullish. Its test just reacted down to 2097.00, and any deeper would reinstate the morning's decline.

Otherwise, back above 2099.75 and 2101.00 could trigger bias-up, but fresh highs would still be much more vulnerable to reversing back down before the final hour.

Reacting down from the 2105.25 high fell back to and through 2101.00 and 2099.75 to test the open's 2096.25 highs by 3 ticks. It was a singular downleg, originating from the high print, so it's probably just a warning shot. Reacting down from the high's retest would be more capable of extending down deeply. Unfinished business below was left outstanding at 2088.25. Testing it first, before retesting the high, would not prevent retesting the high later. And it would be easier to extend higher. So the more bullish scenario is probably down, first. Details and other markets coverage are discussed in the post-market Wrap recording here.

Monitor overnight Globex trading in the chaRTroom here.

THU morning signal (triggered at 10:15 ET) SPX ES Bias-up: above  2107.00 2101.00 ...would target  2113.25  2107.25 Bias-down: under  2099.00  2093.00 ...would target 2093.50  2087.50 Signal status: LATE BIAS-DOWN 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.