Day Trading Trading Signals - 01-09-2015

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

Enter the Chartroom here (pre-open Market Tour begins at 8:55 ET)

Through the prior close...
Thursday morning followed its template for working higher to the corrective rally''s next higher target, which was 2052.00 since the open had already fulfilled 2044.00. No higher objective would be consistent with the rally being only a correction that is retraced to recent lows. Intraday patterns had created room for noise up to 2055.50 and 2058.25, and each was met and held through successive timing windows. But the late pullback only came within 3 ticks of 2052.00, instead of closing under it, which would have helped to confirm a corrective rally was ending.

Overnight action''s new info...
Thursday''s late slide extended to and through 2052.00. Narrow, choppy ranging around it has only recently blipped-down momentarily attack 2047.00.

If, then...
Having touched 2055.50 and 2058.25 intraday, closing above them would have invalidated the current rally as being only a temporary correction. Since only they were rejected, and 2052.00''s recover may have held, closing above 2055.50 and 2058.25 today could still invalidate the correction and put into play new highs. The burden of proof is on sellers to react down decisively under 2052.00, even if that path were to first probe temporarily above yesterday''s highs.

First Trade...
No preliminary levels are considered ahead of the Employment Situation report.

FRI morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2061.75
2055.50
...would target 2068.00
2061.75
Bias-down: under 2051.25
2045.00
...would target 2046.25
2040.00
Signal status: INVALIDATED NO-BIAS, TESTED, BOTH BIAS SIGNALS 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.

No more news is bad news.

The Employment Situation report''s reaction surged16 points to this morning''s 2061.75 bias-up target. Sideways ranging into the open had tested the 2055.50 bias-up signal as support.

Only the open''s momentary blip-up remains of that pre-open optimism. That, and a bounce off of the 2045.00 bias-down signal. It held late enough to trigger no-bias at 10:15. But even that became irrelevant by breaking under it through 10:30.

The 2040.00 bias-down target was never triggered, but it was met on the way down to 2036.00. Now a bounce is testing 2042.50.

This HAD been a no-bias environment. Now, the bias is rejected. It was too late to trigger bias-down or to invoke the grace period. Bias parameters have no influence this morning.

The decline''s likely objective is 2029.00. That was the interim target after 2022.00 on the way up to 2044.00, and it has yet to be relevant otherwise. The bigger picture scenario that yesterday''s highs ended a corrective rally has yet to be signaled.

FRI afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2057.25
2050.50
...would target 2062.25
2055.50
Bias-down: under 2041.00
2034.25
...would target 2035.75
2029.00
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.

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 Mar Contract (EC, ETF: (FXE))
Friday''s outside day formed a bullish Pivot Reversal. The open gapped up from Thursday''s new low close, reversed down to print its own new low close, and yet recovered back up to and through the morning''s high. Extending above 1.1865 would target at least 1.2000.

Gold Feb Contract (GC, ETF: (GLD))
Friday''s bounce filled the gap back up to Tuesday''s 1219.00 close, but didn''t close higher. While that keeps alive the potential for a pullback targeting 1195.00 or 1185.00, delaying the pullback much past Monday''s open would more likely resume the rally targeting at least one more higher close as required.

Silver Mar Contract (SI, ETF: (SLV))
The 16.20 pullback target was attacked to within a penny before Friday''s open, and then attacked again afterward, recovering to 16.60 intraday. Back to 16.20 again would likely break lower to new lows.

30-year Treasury Mar Contract (US, ETF: (TLT))
Thursday''s 146-22 low held the Employment Situation report''s reaction, which probed 147-10 resistance up to 148-00. Closing back under 146-30 would target 146-12 as just a deeper temporary pullback, but under 146-01 would signal a new downleg underway.

Crude Oil Feb Contract (CL, ETF: (USO))
Despite having probed above 49.00 overnight, a brief dip Friday morning retested the 47.45 target. Its prior tests this week have yet to launch a rally leg, which increases the vulnerability to a fresh low testing 45.90.

Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Friday''s bounce to 2.98 resistance reacted down a dime. Like Thursday, Friday''s price action developed entirely within Wednesday''s range, neither probing a fresh low nor breaking above resistance.

If Friday''s drop can''t attract new sponsorship Monday... then there isn''t much that can attract sellers, or not many sellers to be attracted. And if Friday''s drop was no more than a temporary correction, then new highs wouldn''t take much longer.

Pattern points... (Setups and technicals)
Thursday''s close was above the 2052.00 corrective bounce limit. However, the close was still within a pattern of which 2052.00 was a critical element. And room for noise intraday at 2055.50 and 2058.25 were tested but not recovered through the close. Friday was greeted with the door open to the corrective bounce having ended.

Friday morning''s steep, deep slide might seem to confirm that the direction is reversing down. Especially since that followed rejecting the open''s gap up to 2061.00. And especially since the reversal was so aggressive and the slide was so substantial, down to 2031.00.

But the drop was also limited in duration. It was contained entirely within the morning''s bias environment. The 2045.00 bias-down signal wasn''t even broken until after triggering no-bias, which the afternoon retraced entirely.

So long as last week''s corrective rally may have ended and reversed down, a deeper dip to 2029.00 is likely, and likely not to hold. Otherwise, immediately recovering at least 2052.00 would help to put new highs into play. Especially Friday''s interim dip was steep and deep.

What''s Next... (Outlook and opportunities)
It''s been three weeks since our last Saturday Review, so be sure it''s on your calendar for this weekend, at 9:30am ET. I''ll send out a remind in the morning, with this link.

MON morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2051.75
2045.00
...would target 2057.00
2050.50
Bias-down: under 2038.75
2032.25
...would target 2033.25
2026.50
Signal status: BIAS-DOWN, BIAS-DOWN  TARGET EXCEEDED 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.