Day Trading Signals and Strategy - 08-06-2015

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

CHARTROOM LINK(s)
o Win XP-Friendly entry
o non-xp friendly (ilinc)
(pre-open Market Tour begins at 8:55 ET)

Through the prior close...
Wednesday''s open resumed and extended the overnight rally, renewing the bias-up signal, and testing the 2105.50 renewed bias-up target to 2107.00. That ended with the morning bias environment''s exit, which began a 15-point slide to 2091.00 into the afternoon bias environment''s entry. A corrective bounce to 2098.50 resumed sliding into the close, leaving the afternoon''s 2088.75 bias-down target outstanding.

Overnight action''s new info...
The late slide extended to within 1 tick of Wednesday''s low at 2091.00. Bouncing 5 points to test 2096.00 in positive territory retraced the slide by 61.8{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6}. Its reaction down has held 2092.00.

If, then...
Wednesday afternoon''s corrective bounce was intended to restart the decline so it could fulfill unfinished business below at the afternoon''s 2088.75 bias-down target. That could have been neutralized overnight by testing it, or neutralized overnight by rallying back above Wednesday afternoon''s highs. Not doing either makes the decline likely to resume this morning, still capable of holding a test of 2088.75, but not as likely -- and now it is also this morning''s bias-down signal.

First Trade...
This morning''s preliminary signals don''t seem very informative. Exiting the open at 9:45 under 2088.00 would be likely to trigger the 2088.75 bias-down signal at 10:15. Exiting the open above 2097.50 would be unlikely to trigger bias-down.

Another corrective bounce traps even more longs.

Yesterday afternoon''s corrective bounce to 2098.50 was intended to reset the decline, which had become mired in a messy range. And the decline''s resumption was intended to fulfill the afternoon''s 2088.75 bias-down target.

Rather than extend down overnight, yesterday afternoon''s high was retested pre-open. It wasn''t needed, but that reset the decline again.

So, the pre-market Tour''s strategy was to get short quickly. The shallow post-open bounce didn''t suggest otherwise, and soon 2088.75 was being tested. It is also this morning''s bias-down signal, and it ultimately triggered

Now this morning''s 2083.25 bias-down target has been touched. Oversold 1-minute and 3-minute RSIs at the low will require its eventual retest. But they were higher lows (technicals), and it was 10:30 (timing), at the target (pricing). Its reaction is already up 5 almost points.

Although the recovery could extend higher uninterrupted, I''m monitoring for a pullback to test 2085.00-2086.25 (being tested now).

This is the same template that could have greeted the open in recovery mode after satisfying unfinished business below overnight. Exiting the bias environment at 11:30 back above its 2088.75 bias-down signal would indicate the selling was likely done, and above 2092.25 that buyers had retaken control.

THU afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2085.50
2080.25
...would target 2091.00
2086.00
Bias-down: under 2078.00
2073.00
...would target 2071.25
2066.00
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.

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 Sep Contract (EC, ETF: (FXE, UUP))
Firming Thursday off of Wednesday''s test of 1.0855 support tested 1.0920-1.0945 resistance to remain only a bounce refueling sellers. Back under 1.0900 would resume the decline.

Gold Dec Contract (GC, ETF: (GLD))
Testing of 1083.00-1087.00 support bounced Thursday up to 1093.00 resistance, not yet breaking the range either way to signal trending in that direction. Above 1100.00-1105.00 would signal an upleg underway, and the risk is to fresh lows at 1062.00 or 1050.00.

Silver Sep Contract (SI, ETF: (SLV))
Ranging narrowly around 14.55 continued to avoid trending, which would be signaled beyond either end of the 14.35-14.90 range.

30-year Treasury Sep Contract (US, ETF: (TLT))
The recovery from Wednesday''s 155-06 low extended higher Thursday to probe above 157-00, targeting a retest of Monday''s 157-30 high up to 158-08 so long as 155-16 now holds as support.

Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fresh lows Thursday morning fulfilled the 44.25 target. The decline wasn''t rejected by a bounce, or renewed by closing below it, making fresh lows likely, even if only temporarily.

Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Probing a nickel under 2.77 ahead of Thursday''s EIA report reacted up sharply to test the 2.83 buy signal. It held its test for now, but remains the buy signal.

FRI morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2087.50
2082.25
...would target 2093.25
2088.00
Bias-down: under 2078.25
2073.00
...would target 2071.25
2066.00
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.