Day Trading Signals and Strategy - 05-19-2017

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

NEW DAILY SCHEDULE First, watch the pre-open Tour recording HERE <<== Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close... Thursday behaved bullishly, but each bullish element was lacking. The overnight 2344.50 low had found support at filling a 4-week old gap. It wasn't retested intraday, but Thursday's open still gapped down under Wednesday's low instead of isolating sellers. The session rallied throughout, but didn't probe a prior session's prior high until the afternoon touched 2375.00. Exiting the afternoon bias environment above the morning's 2367.50 high formed a short-squeeze setup, but it wasn't exploited as the balance of the session slid to 2363.50... Overnight action's new info... ...And through it. Sliding into and out of the close eventually reached 2361.00, finding the support of "lower prior highs" that had preceded Thursday's last rally. Another rally from there is now probing back above Thursday morning's high to 2371.50. Still short of Thursday afternoon's high. If, then... Overnight firming won't matter much intraday if the open isn't already recovering yesterday's 2375.00 high. That would form a "session-long rally" setup, and have the best chance at inverting the bearish WedEX's afternoon influence. That still wouldn't negate the confirmed trend change signal, which itself makes the inversion unlikely. So, morning strength would likely resolve into a new downleg. First Trade... [Click here to view the Bias parameters] Exiting the open at 9:45 above 2373.25 would be likely to trigger the 2369.00 bias-up signal at 10:15. Exiting the open under 2366.00 would be unlikely to trigger bias-up. Phonetic dictation... have a good morning and welcome it's Friday got a late start today I apologize so this recording is coming a little late but it's a real quick one we're going up or down this morning and then probably do okay details so Yesterday rally here's the problems with yesterday's routing that the origin was a gap down under Wednesdays Lowe's the overnight from under it therefore was it isolated overnight low wasn't retested but it was over that and it wasn't immediately rejected that didn't prevent obviously doesn't prevent Browning anyway here's an example mine's the quality of it in fact it wasn't until it wasn't until the afternoon that a prior sessions high that is Wednesday's prayer I was even through a relevant window night during but through coming out of it not only that but then also exceeding the morning so I created a short squeeze set up back to not having isolated the overnight sellers that undermined it it would have been entirely credible and it developed but instead the balance of the session if I'm leaving the bus environment trying to back down so where did you go to will eventually went to lower price that had lunch that last really like so there is one opportunity here to Rally with this morning for having that test and if the open can Gap up significantly enough just opening above yesterday afternoon so I sorry yesterday morning so I 6750 that in itself at least creates room up to 75 just a vacuum to possibly test it we do have two or three I would say 1 or 2 things bearing down on the market anyway there's the context of this being a trend change having gap down on Wednesday under the fryer low from a prayer from a high and then not invalidating it yesterday on Thursday to 7:30 or close is likely and we've also got the sorry we've also got the bear attacks coming this afternoon so if which is currently indicated if this morning but actually extended by the open to not go through but to something that can extend through quickly to the opening 15 minutes to the prior High 275 that could actually for me sexually we'll talk about that if it happens that could invert the bear sweater and that would be interesting into the weekend but it probably wouldn't invalidate trim down and because it's really not in good luck somebody to invalidate the trend down that session long rally setup is on your mind to begin with alright if there's any kind of morning 6752 the open might be looking for a long probably be looking for long as the morning until the afternoon but otherwise we could be training them to the day that's not speaking to the slope for the severity of it which of course will need to see the opening action to identify that alright weird holding pattern Rudy is it finally we starting resuming I should say this confirmed break out from the inverted Head and Shoulders?! And the euro which gap down in fact fill the Gap back to two Tuesdays closed so there's support their held that support and now probably hire as well gold rejected its probe of Our Lives we can see that little that little range they're actually just ended range which is what they told us we were about ready to extend them 6150 closing under its prior low and see the cursor there 52 so the upside momentum lapses on that really questionable it didn't confirm Wednesday's break out Above This multi-session range so I went down that's over waiting for underperforming an island out of Wednesday session overnight 1675 is being probed the island just stay away from the island 5252.

Short-squeeze finds an opening. Hovering at overnight highs suddenly broke higher at the 2370.00 open. Surging soon extended through yesterday's to 2379.00. Consolidating around the 2376.50 bias-up target exceeded it at 10:15 to renew the bias-up. The 2381.25 renewed bias-up target is being tested now.

2381.25 is only being overlapped, and not yet exceeded. There's room for noise up to 2383.75, which need not be touched. But reversing down will be difficult until 3-minute RSI is stops being persistently overbought.

Is this the short-squeeze that yesterday afternoon had threatened? The vulnerability was there. And nothing prevented extending higher this morning. Meanwhile, headlines are the catalyst for this morning's surge (Fed speaker Bullard keeps door open to QE). That's artificial, and more easily reversed than an organic short-squeeze. This afternoon's bearish WedEX will be greeting an artificially inflated rally. There's no assurance of it being influential, or the degree of its influence, but there's plenty of room below.

FRI afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2385.25 2383.75 ...would target  2390.75  2389.50 Bias-down: under  2377.25 2376.00 ...would target  2371.75  2370.25 Signal status: 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.

No signs yet of a bearish influence. Trick question: What do we call a bias-up signal that is triggered by only 1 point? ...Answer: Bias-up. The WedEX influence begins sometime between noon and 1:30, i.e. the morning's bias environment and noon hour fully lapsing. This window began at 2383.00 and extended up to 2386.50. Its reaction down to 2383.25 was recovered in time to trigger the 2383.75 bias-up signal at 1:20. Triggering bias-up is in conflict with this afternoon's bearish WedEX influence. Back under 2383.75 at 1:30 would have invalidated bias-up signal. Too late for that. Reversing down anyway under 2382.50 would still be credible for extending down and behaving bearishly, regardless of it leaving "unfinished business above." Closing above the 2383.00 noon hour entry, and the 2385.50 1:30 print, would invalidate the bearish WedEX. Reversing down hard from testing the afternoon's 2389.50 bias-up target would be possible, but that pattern isn't likely on a Friday afternoon. A successful bearish WedEX would more likely ignore the afternoon's bias-up signal.

Friday afternoon's behavior seemed at first to have forgotten about the bearish WedEX influence. The bias environment was entered just above the noon hour's entry. Bias-up triggered. And higher highs were probed. If not for a headline (Russia probe reaches current White House official), then perhaps the session's uptrend would have extended. But the headline's reaction plunged 10 points. More important, the reaction wasn't retraced back up, not meaningfully, and not above the noon hour's entry. So, the bearish WedEX was productive. Was it WedEX, or was it the headline? The reaction down could have been retraced, at least to close back above the noon hour's entry. Weak-handed sponsorship would have been absorbed. But this dip was suppressed into the close. Gapping open Monday above Friday afternoon's high would serve by proxy to undermine the bearish WedEX, and separately also form a "session-long rally" setup. Gapping up, and trending higher through the open. Otherwise, regardless of "unfinished business above" now outstanding at 2389.50, bearish WedEX is likely to be more influential Monday morning. Details and other markets coverage are discussed in the post-market Wrap recording here. REMINDER: I'll email this weekend's Saturday Review link in the morning, it starts at 9:30am ET.

MON morning signal (triggered at 10:15 ET) SPX ES Bias-up: above  2387.75 2386.50 ...would target  2393.25  2392.00 Bias-down: under  2378.00  2376.75 ...would target 2371.50  2370.25 Signal status: 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.