Day Trading Trading Signals - 02-11-2016

THU morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 1855.75  1850.25 ...would target 1861.75  1856.50 Bias-down: under  1845.50 184o.25 ...would target  1840.00  1834.50 Signal status: waiting for trigger 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.

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... Gapping up and extending higher Wednesday attacked 1877.00 during the morning bias environment's surge. Crude Oil had inspired that move, despite having put new lows into play. Both returned their gains, and matched their steep surges as fresh session lows were probed. Selling did not extend until the latest opportunity, not optimal but still credible for gaining traction to fulfill its 1848.00 potential down to 1843.50. No unfinished business above was left outstanding. Overnight action's new info... There was barely any hesitation in extending down to 1832.00 well before midnight. But ranging back up to 1840.00 didn't break until Europe's opens. And it broke lower, sharply, first to 1809.00 which was consolidated up to 1817.00. A spike down to 1802.50 snapped back up quickly to 1818.50. If, then... Breaking under the morning's lows so late yesterday had prevented the move from signaling the decline has resumed. Yet, a 44-point overnight slide just retested the 3-week old 1805.00 lows. Extending down overnight sharply and relentlessly to whatever degree is more difficult to extend post-open. By the same token, extending that overnight drop post-open -- under a relevant support and through a relevant timing window -- can produce a multiple of the overnight slide. First Trade... Exiting the open at 9:45 through 1807.00 would be unlikely to extend down this morning, whether by absorbing a retest of the low or simply by rallying back up to the 1834.50 bias-down target -- with potential up 1850.00. Not recovering by 9:45 from probing back under 1807.00 would be likelier to trend down through the morning.

Did the bounce refuel sellers? Opening action surged  instead of retesting overnight lows. Potential up to 1834.50 was attacked to within 1 point, taking RSIs overbought. That has been steadily retraced to signal further reaction coming. Its 1815.25-1817.00 target has been fully tested. Breaking under it would all but target a retest of overnight lows. And retesting overnight lows would all but resume the decline.

Why is it possible again to resume the decline? Not already extending down at the open had made a reaction up likely. That was because of the difficulty attracting sponsorship at that stage. But now a bounce is reacting down. And the bigger challenge has become attracting sponsorship to stop the trending underway.

Attention is turning from price to time. Not timing windows, but time remaining for liquidity. And not just the week's remaining liquidity which is usual for Thursday mornings, but also the illiquidity of a three-day holiday weekend. Breaking lower through the bias environment's exit could become increasingly ugly through the afternoon. Otherwise, already rallying again would target 1850.00 and possibly much higher.

THU afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 1830.75 1825.25 ...would target  1835.75  1830.50 Bias-down: under  1814.25  1809.00 ...would target  1808.50  1803.00 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.

Post-open bounce didn't gain any traction. Surging to within 1 point of the 1834.50 bounce potential didn't prevent exiting the bias environment 11 points under the 1818.50 open. That was a test of the critical 1807.50 level whose break through the open would have resumed the decline. It still might. Bouncing to retest 1818.50 held. Exceeding it would have targeting 1825.25, whose recovery could target new session highs at 1850.00 and higher. Meanwhile, a reaction down is testing 1811.50. It might hold, too. But exceeding it would target the 1797.25 area. And any lower (which would then be likely) would resume the decline. PROGRAMMING NOTE: I'm changing locations which should have a positive impact on bandwidth, which has suffered this morning in the chaRTroom.

FRI morning signal (triggered at 10:15 ET) SPX ES Bias-up: above  1839.75 1834.50 ...would target  1846.50  1841.25 Bias-down: under  1827.25  1822.00 ...would target 1816.75  1811.50 Signal status: BIAS-UP, BIAS-UP TARGET MET 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.

Thursday's last surge probed the morning's high, with the road wide open for almost doubling the 27-point surge that had preceded it. But the 1834.50 resistance wielded more influence than anticipated. And that's interesting. Because that's pessimism. Still pessimistic while probing the morning's high, even after extending the 27-point surge that had stopped pessimistically short of touching the morning's high. Sellers remain in control, but that can be negated by gapping up. Absent gapping up, the pattern remains vulnerable to trending back down. Details and other markets coverage are discussed in the post-market Wrap recording here.

Overnight Globex trading in the chaRTroom here.