Real Time Day Trading Signals - 02-18-2015

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...
Three-day weekend volatility continued settling down Tuesday, while also laying the groundwork for extending higher later -- a test of the 2087.50 bias-down signal put into play an offsetting test of the 2095.75 bias-up signal at new highs. Fresh highs through the noon hour probed the objective up to 2099.50, and held up long enough to trigger the afternoon''s bias-up signal -- it was left outstanding, as more groundwork for extending higher later.

Overnight action''s new info...
Tuesday afternoon had drifted to 2093.25 before a last-minute pop-up. A narrow 2-point range at 2096.00-2098.00 through the night eventually dipped to within 1 tick of 2093.25. Now the original 2-point range is being attacked from below.

If, then...
Yesterday afternoon''s 2101.50 bias-up target became "unfinished business above" that requires being tested eventually. That should be sooner, rather than later, even if only to neutralize the rally''s higher objectives so a downleg can begin. That''s a risk, since that''s the only outstanding objective, and since yesterday afternoon''s probe of fresh highs weren''t maintained. Neither was the afternoon''s probe of fresh highs rejected, so the rally remains intact, albeit vulnerable to reversing down if another fresh high isn''t maintained. Ongoing Grexit drama or reaction to this afternoon''s FOMC Minutes can produce extreme sentiment that is vulnerable to becoming a sentiment extreme. Either way, Friday''s impending expiration should become a catalyst for sudden re-positioning that exacerbates any trending into Wednesday''s close.

First Trade...
Exiting the open at 9:45 above 2103.00 would be likely also to trigger this morning''s 2100.75 bias-up signal 30 minutes later at 10:15. Exiting the open under 2088.50 would be likely also to trigger the 2089.00 bias-down signal.

Refueling buyers is messy.

The overnight ranging back down to 2093.50 had extended down to 2090.00 into the open. Its initial reaction up was reversed to a fresh low testing the 2089.00 bias-down signal down to 2088.50.

But the bias-down signal wasn''t touched until AFTER 10:15. Only the pre-open low was being attacked by then. Bias-down wasn''t triggered so this is a "no-bias" environment. Bias-down wasn''t TOUCHED, so an offsetting test of the 2100.75 bias-up signal isn''t required.

I expect 2100.75''s test anyway. Yesterday''s 2101.50 objective is outstanding above the 2100.75 bias-up signal. And the bias-down signal did hold a test through 10:30. It reacted up almost immediately into a 5-point rally now testing 2093.50.

Exiting the bias environment under 2089.00 would make fresh highs today unlikely. Meanwhile, I''m still assuming the open''s selling was just defensive posturing ahead of today''s events.

WED afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2099.25
2095.75
...would target 2104.75
2101.50
Bias-down: under 2092.25
2089.00
...would target 2087.75
2084.25
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))
Wednesday''s reaction down from having recovered up to 1.1425 was itself recovered back, Not quite back up to 1.1425, but into Tuesday''s range that was testing it. Not extending higher aggressively Wednesday morning would start to be bearish.

Gold Apr Contract (GC, ETF: (GLD))
Lower lows Wednesday tested 1200.00, and the second consecutive lower close confirmed Tuesday''s deep breakout. The 1185.00-1195.00 target remains intact -- best singularly represented as 1191.50 -- so long as bounces now hold 1216.00 as resistance.

Silver Mar Contract (SI, ETF: (SLV))
Wednesday''s gap up only tested Tuesday afternoon''s highs before reversing back down to Tuesday''s lows. Tuesday''s breakout wasn''t confirmed by a second consecutive lower close, but buyers didn''t gain any traction for their efforts.

30-year Treasury Mar Contract (US, ETF: (TLT))
Wednesday''s reaction to FOMC Minutes extended the morning''s firming from Tuesday''s fresh low at 143-30, and tested the 144-30 bounce limit. Its recovery introduces potential up to 146-14 or 147-00, even if only as a temporary corrective bounce.

Crude Oil Mar Contract (CL, ETF: (USO, UWTI))
Another reaction down Wednesday from testing 54.00 is assumed to be only temporary since there was no bearish reason for Tuesday''s third test of 54.00 resistance.

Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Tuesday''s dip to the original 2.70 buy signal was recovered Wednesday to test Tuesday''s gap up to 2.85, helping to confirm the uptrend remains intact.

If FOMC Minutes can''t produce more than a surge and retest... then Wednesday''s "inside day" can''t be very predictive. But it can be contrary, and it can suggest that initial trending out of Wednesday''s range will only be reversed. Probably not immediately, but nor after very long.

Pattern points... (Setups and technicals)
It took awhile. Forever, from some perspectives. But Wednesday''s opening drop finally recovered to prove it was only temporary. 

Overnight selling had been contained to Tuesday''s late pullback low. The extra dip before the open defined the range that persisted until the afternoon''s FOMC Minutes. The initially favorable knee-jerk reaction was retraced entirely, but only back to its origin. And then the initial favorable reaction was recovered.

Price action within so narrow a range as Wednesday morning is very frustrating to try trading it. But the bigger picture expectations -- that the late extra dip would not extend -- kept the focus on buy signals and upward resolutions.

Now the question is whether the afternoon''s fresh session highs fully rewarded Wednesday morning''s buyers for absorbing the probe into negative territory. They didn''t gain traction for their efforts, according to the bias environment exit and the final hour entry. And they only attacked Tuesday''s prior highs.

What''s Next... (Outlook and opportunities)
Wednesday''s last hour hovered pessimistically short of touching Tuesday''s highs. This is potentially bullish from a contrarian perspective, and it suggests fresh highs will be probed -- probably Thursday and probably not by a little. But the hesitation is otherwise similar to Tuesday afternoon''s failed probe of fresh highs, which suggests that the next probe of fresh highs will be living on borrowed time.

THU morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2103.25
2099.75
...would target 2110.50
2107.25
Bias-down: under 2094.00
2090.75
...would target 3089.25
2085.75
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.