Proven Day Trading Signals from Viditrade - 02-03-2015

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...
Monday morning''s shallow opening strength didn''t attract sponsorship that could recover from testing the range''s lower-end. So, the lower-end was probed to fresh lows at 1973.75. Its 30-point reaction ahead of noon was corrected by 20 points in time for a 35-point rally, testing Thursday-Friday''s 2017.50 close. The final hour''s entry didn''t reflect the rally gaining traction for its effort, but the rally extended higher anyway. Oversold RSIs were left outstanding at the low

Overnight action''s new info...
Dipping through midnight down to 2007.00 was recovered and extended to fresh highs at 2025.00. Monday''s close held a pullback that has recovered to fresh highs at 2028.00.

If, then...
Will Tuesday''s open succeed where Monday''s open failed, or repeat it? Gapping up enough to break free from any attraction back to the lows would likely trend higher through the morning. Otherwise, another shallow gap up would attractive more sellers than sponsorship for extending higher.

First Trade...
Exiting the open at 9:45 above 2028.50 would be likely also to exceed the 2026.50 bias-up target at 10:15 to renew the bias-up signal. Exiting the open under 2014.25 would be unlikely to trigger the 2020.00 bias-up at 10:15, and at least test the 2010.00 bias-down signal.

Getting ahead of itself.

Exceeding 2028.50 through 9:45 made the 2026.50 bias-up target likely to be exceeded through 10:15 to renew the bias-up signal. Its renewed bias-up target(s) stretched as high as 2035.00. The first half-hour had attacked it already to within 2 ticks by 10:15.

That was the high. Choppy ranging through 10:30 has broken lower. Sharply lower -- 2022.25 was just touched.

The premise of a renewed bias-up signal is that sellers are marginalized for the duration of that timing window. This would be irrelevant if that timing window only ranged flat or higher.

But this timing window is dropping. Selling pressure is being expended at a time when it''s unlikely to gain traction for the effort. The renewed bias-up premise says these sellers/shorts are being trapped.

1-minute RSI diverged positively at the pullback''s low. It has reacted up 6 points to test 2028.00. It was sudden and steep, but not yet substantial, so the bounce is not yet proof that the trapped shorts are fueling a let to fresh highs.

But that''s still the premise.

TUE afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2037.50
2031.00
...would target 2042.50
2036.00
Bias-down: under 2026.50
2020.00
...would target 2021.00
2014.50
Signal status: LATE BIAS-UP  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))
Immediate strength Tuesday was required to exploit Monday''s firming, and to prevent it from only having stretched the rubber band for snapping back down to the lows. The open did gap up above 1.1385 and extend sharply higher throughout the day to test 1.1545 resistance. The second consecutive higher close suggests a more durable rally is underway. Back under 1.1425 would signal a deeper pullback underway.

Gold Apr Contract (GC, ETF: (GLD))
Bouncing overnight to 1286.50 was rejected by gapping down Tuesday to and through the 1272.50 sell signal and extended down sharply intraday under 1256.00. Fresh lows remain likely as the bigger pullback continues to develop, targeting 1232.00-1236.00.

Silver Mar Contract (SI, ETF: (SLV))
Tuesday''s narrow range was a product of Monday''s narrow range. Friday''s retracement of Thursday''s drop hasn''t gained any new traction to prevent retesting Thursday''s lows, and extending lower.

30-year Treasury Mar Contract (US, ETF: (TLT))
Monday night''s drop back under 150-11 made the 151-28 target unlikely to be exceeded. Closing back under 149-14 signal the trend is reversing back down, its timing still subject to a second consecutive lower close that would underming backing-and-filling up to 150-15.

Crude Oil Mar Contract (CL, ETF: (USO))
Higher highs overnight to 51.55 were extended intraday to test 54.25 now allowing room for a pullback down to 52.75 without invalidating the rally''s momentum. Back under 51.50 would signal a deeper pullback underway.

Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Two days of fresh lows still overlapping the prior session''s range made any early strength credible for extending higher. It wasn''t very early, but the 2.70 buy signal did trigger meaningful follow-through. A second consecutive higher close Wednesday would greet Thursday''s EIA report in a position of strength to extend sharply higher.

If Tuesday''s dip had resolved up sooner... then the balance of the session would have trended much higher. Not that adding 10 points was anything to sneeze at. And it avoided a potential plunge setup. But it was hard fought.

Pattern points... (Setups and technicals)
In other words, there''s still pessimism. After gapping up 7 points, and after extending another 18 points, after trending higher through the afternoon... there''s still pessimism. 

Pessimism is potentially bullish from a contrarian perspective. So, Tuesday''s 25-point rally is entirely capable of extending higher Wednesday.

Nothing prevents the pattern from extending higher without delay. But nothing requires it, either. Only Tuesday afternoon''s bias environment exit reflected momentum, and the final hour''s entry did not, so an interim dip Wednesday morning is possible.

What''s Next... (Outlook and opportunities)
Gapping up and extending higher through the morning would all but require probing recent highs above 2059.00-2062.50 the same day. Gapping down under the last relative low at 2032.00 wouldn''t necessarily reverse the trend back down, but the session would be on defense.

WED morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2056.50
2046.25
...would target 2059.25
2053.00
Bias-down: under 2041.50
2035.25
...would target 2034.75
2028.50
Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL 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.