Day Trading Signals and Strategy - 11-16-2015

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... Gapping down Friday to 2037.00 didn't hesitate extending down to 2023.00. Consolidating there resolved up into a noon hour bounce back to the 2037.00 open. But that was Friday's last and only bounce, as the balance of the session trended down, putting into play 2012.00, and potentially 2007.50. The final hour was spent piercing and probing the 2017.00 area. Overnight action's new info... Headlines from Paris crossed in time to trigger another downleg to 2012.00. The weekend's fuller revelations triggered a gap down Sunday to 2006.50. The opening bar also touched 1998.50, but the balance of the night trended back up. Europe's opens were greeted  from just under the 2017.00 area, and the reaction extended back into positive territory, up to 2024.50. Ranging back down to 2019.00 has also attacked 2026.00. If, then... Crass thought it may be, the market ultimately trades on only earnings and liquidity. Even then, much more so on the latter. The emotional reactions are discounted and the market moves on. That applies equally to Sunday night's open, as to gapping up too much in reaction. The decline's 2012.00 target hasn't been met intraday, but still could be, especially if the open doesn't recover resistance. Friday morning's ~2023.00 "higher prior low" is natural resistance, and it is being tested. Opening back under Friday's 2017.00 last-hour low could extend to retest the overnight low entirely. First Trade... Exiting the open at 9:45 above 2029.00 would be likely to trigger the 2027.00 bias-up signal at 10:15. Exiting the open under 2020.25 would be unlikely to trigger bias-up. Exiting the open under 2013.50 would be likely to trigger the 2017.00 bias-down signal.

Pre-open dip finds more buyers, and another peak. The overnight recovery had attacked 2026.00. Structurally, it had tested the "higher prior lows" of Friday morning's consolidation. That's resistance, and it pushed back. The pre-open reaction down came within 1 point of the 2012.00 bias-down target. The 2017.00 bias-down signal was recovered into and out of the open, and not by a little. The overnight high was probed up to 2030.00. But the 2029.00 preliminary indication held its test through 10:15. This made the 2027.00 bias-up signal unlikely to trigger. And it did not trigger. But momentum hasn't so much reversed down, as it has given way to choppy ranging centered around 2027.00.

The bias environment will be within view of lapsing in a half-hour. Meanwhile there is room for noise back down to the 2017.00 bias-down signal.

A fresh low must still break under 2012.00 to suggest a retest of the overnight lows. But greeting the bias environment lapsing by just ranging around 2027.00 would be vulnerable to resuming the rally well into the afternoon.

MON afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  2033.50 2029.00 ...would target  2038.75 2034.50 Bias-down: under  2024.50  2020.25 ...would target 2019.75  2015.25 Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED 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.

Still overlapping overnight highs. Holding the 2027.00 bias-up signal's test didn't require an offsetting test of the 2017.00 bias-down signal since that was touched during the open. There was room for noise down to 2017.00 nevertheless, but it was barely attacked to within 2 points. Now the bias environment has lapsed, and 2027.00 is being retested as resistance. Recovering it through the bias environment lapsing would have resumed the overnight recovery. Absent that, its proxy would enter the noon hour above the morning's 2030.00 highs.

Neither condition was met, although sellers haven't retaken control.

Being the noon hour, fresh highs can be probed above 2030.00 without requiring further reward. And probing under 2023.00 can target fresh post open lows down to 2012.00 or lower. Anything in between is not predictive, except that delaying another upleg could easily default to at least a momentary fresh session low.

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)) Volatility in the wake of Friday's tragedy didn't extend the decline, further suggesting that a bottom is forming. Gold Dec Contract (GC, ETF: (GLD)) Initially gapping up Sunday night was retraced back into the range. No further downside is required before launching a durable rally, which would be triggered by closing above 1089.00. Silver Dec Contract (SI, ETF: (SLV)) Sunday night's gap up was largely retraced, but not reversed. A retest of last week's low is likely to hold while in the process of forming a bottom. 30-year Treasury Dec Contract (US, ETF: (TLT)) Gapping up Sunday night attacked the 154-10 limit whose recovery would signal momentum reversing up. Unless exceeded immediately Tuesday, the corrective bounce has likely ended and a fresh low is in-play. Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short)) Another fresh low Monday was accompanied by RSIs diverging positively while the 39.95-40.00 target area was attacked to within a dime. The intraday reaction up back above 42.00 is credible at least for being a temporary corrective rally. Natural Gas Nov Contract (NG, ETF: (UNG, UNL)) Gapping up to 2.37 Monday helped to serve by proxy for not having closed above it Friday along with 2.31. Closing above 2.41 is the confirmation that a new rally leg is underway.

Too much of a good thing? Monday afternoon's rally gained traction by exiting the bias environment above the noon hour's high and entering the final hour even higher. That represented 10 points of the rally. The final hour trended another 10 points to fulfill the intraday rally's next higher objective at 2049.25. Was that already enough reward for the afternoon traction? Trending higher overnight wouldn't make it any more stable. The most bullish scenario would inject a little pessimism for a pullback to 2035.00. Then trying to extend higher Tuesday morning would be credible for trending. Details and other markets coverage are discussed in the post-market Wrap recording here: https://roddavid10.mitel-nhwc.com/join/tyfjzfh

This evening, monitor overnight Globex trading in the chaRTroom at: non-xp ilinc

TUE morning signal (triggered at 10:15 ET) SPX ES Bias-up: above  2054.25 2050.00 ...would target  2060.00  2055.75 Bias-down: under  2044.00  2039.75 ...would target 2038.50  2034.25 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.