Day Trading Signals and Strategy - 07-15-2016

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... Thursday started on a high note. Wednesday night's peak had touched the rally's 2168.00 objective, but its reaction down to 2156.00 wasn't entirely recovered before the 2160.00 open. Nor after it. Wide swings probed gradually lower, and last bounced 8 points from 2153.00 to test the 2160.00 open.  The afternoon's 2150.50 bias-down target was left outstanding below, as was the 2168.00 overnight new Globex trend extreme. Overnight action's new info... A somber atmosphere after the Nice tragedy accompanied another leg down through the Globex open. Attacking the 2150.50 objective within 3 ticks was sufficient to launch a quick surge to 2159.00. But that wasn't sufficient to launch a recovery, as the low has been attacked twice more to within 1 tick. If, then... Both opening and closing Thursday around 2060.00 didn't reflect any net post-open change. Thinning sponsorship for the rally was masked by the wide-ranging intraday action. The rally's sponsorship did leave an attraction above at the 2168.00 overnight high, which ought to be retested intraday anyway for being the rally's target. Meanwhile, bullish WedEX influences aren't relevant until this afternoon. It isn't likely to be greeted from above yesterday's highs, since the open isn't indicated to gap up above them -- which would be the only credible start to a morning rally since buyers gained no traction yesterday. First Trade... [Click here to view the Bias parameters] Exiting the open at 9:45 under 2150.50 would also likely trigger the 2152.00 bias-down signal at 10:15. Exiting the open above 2156.00 and 2158.00 would be unlikely to trigger bias-down.

Pre-open surge collapses. Wednesday's open did the same thing. A surge probed above the prior session's highs, but not until very near to the open. That's the stuff of weak-handed sponsorship. The prior session's sponsorship had gained no traction, so extending the rally required maintaining a gap up. The late, weak-handed attempt didn't just fail that condition, but it also created a new one by stretching the rubber band. Wednesday's opening rubber band snapped back down. This morning's has reversed down 8 points so far from 2164.75 to 2156.75. And having held a test of the 2161.50 bias-up signal, an offsetting test of the 2152.00 bias-down signal is in-play. It might be left outstanding, as was yesterday afternoon's lower objective, met overnight. RSIs aren't very enthusiastic about it, barely attacking oversold territory and not at all probing into it. This makes even the most bearish scenario vulnerable to choppy swings and corrective bounces. Also, this being expiration, its unique inputs can skew price action. But 2152.00 must be tested unless the bias environment is exited back above the open's 2164.25 high.  

FRI afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  2164.50 2158.00 ...would target  2170.25  2164.00 Bias-down: under  2156.75  2150.50 ...would target 2150.25  2143.75 Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL. 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.

Target below met, timing window lapsing, weekend ahead. The open's gap up to 2164.00 was the product of a late surge, making it suspect in this pattern. Its reversal down was immediate, and extended down to 2157.00. Rejecting the bias-up signal put into play a test of 2152.00. Non-committal RSIs made the decline vulnerable to a choppy ride. But that was limited to a single bounce up to 2160.50. The decline had soon resumed, and now 2152.00 is being pierced by 2 ticks. Meeting the target does not equate to being a buy signal. Lower lows may yet be probed. RSIs are oversold again, and the bias environment is lapsing. WedEX's bullish influence can now appear, but not necessarily yet. Back above 2155.75 would signal momentum reversing up.

Friday morning was a downtrend. Its 2152.00 bias-down signal required a test for having held a test of the 2161.50 bias-up signal through 10:15. Thursday afternoon's outstanding 2151.50 bias-down target had been neutralized overnight to within 3 ticks, but it was thoroughly tested anyway Friday down to 2149.00. Then came the trend reversal. Friday afternoon's bias environment was entered back at the noon hour's high. Its exit began probing higher. And the position-squaring window was entered at 2157.00. That was enough to consider the bullish WedEX a success. Monday morning should behave bullishly, too, and probably more aggressively. That didn't protect from dropping into and out of the close to 2152.00 amid news of a coup attempt in Turkey. Details and other markets coverage are discussed in the post-market Wrap recording here.

Join us at 9:30 am ET for Saturday Review Monitor in the chaRTroom here.

MON morning signal (triggered at 10:15 ET) SPX ES Bias-up: above  2164.25 2158.00 ...would target  2170.00  2163.75 Bias-down: under  2154.50  2148.25 ...would target 2149.25  2143.00 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.