Real Time Day Trading Signals - 05-12-2016

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... After Tuesday's session-long rally to attack its 2080.50 target, Wednesday's gap down to 2074.25 didn't signal strong-handed selling pressure. But not immediately rallying did keep the door open to extending the overnight pullback. And that's what happened after a momentary surge to 2087.50 with Crude Oil. The morning probed overnight lows down to 2069.00 and the afternoon resumed the decline to within 1 tick of 2059.50. It was an "inside day," but sellers gained traction. Overnight action's new info... The drop's next two targets had been 2059.50 and 2058.00, and the latter was quickly pierced by 2 ticks. Its reaction up to 2062.00 was retraced entirely. The next bounce to 2064.00 was retraced almost entirely, too. The next bounce has extended up to 2071.50. If, then... Yesterday's post-market Wrap described several bullish influences operating on yesterday's decline -- such as it being an inside day, extended by a Symmetrical Triangle, and the afternoon's drop being "no-bias trending." The only bearish influence was the afternoon's sellers gaining traction. Sellers' traction can be inverted by rejecting the afternoon's decline from the bias environment's 2069.50 high. Since yesterday ended by trending down, the same rejection would also form a "session-long rally" setup. The overnight rally is in position, so failing to exploit the opportunity would be as bearish as the missed opportunity would have been bullish. And it's pretty bullish, both targeting Tuesday's high and then also likely resuming the rally. First Trade... Exiting the open at 9:45 above 2071.00 would be likely to trigger the 2067.50 bias-up signal at 10:15. Exiting the open above 2077.75 would be likely also to exceed the 2074.00 bias-up target at 10:15 to renew the bias-up signal. Exiting the open under 2066.00 would be unlikely to trigger the 2067.50 bias-up signal.

Failed bullish setup becomes bearish. A bullish "session-long rally" setup would have formed from gapping up above yesterday afternoon's 2070.00-2071.00 bias environment high. The setup didn't formed, but it didn't trigger. Not for lack of trying -- the retracement was tested for more than 3 hours before the open. It was even probed to almost 2073.00. But 2070.00 was only attacked to within 1 tick post-open. That's worse. The consequences of failing to trigger a formed setup are equivalent to its lost reward. And a session-long rally would have trended up throughout the day. So, with the exception of one timing window --usually the noon hour -- today's session is likely to trend down. Meanwhile, this morning's 2067.50 bias-up signal held as resistance through 10:15, putting into play an offsetting test of the 2058.00 bias-down signal. This now being tested to within 3 ticks, so it won't become "unfinished business" if left outstanding. But exiting the bias environment any lower would all but require retesting last Friday's lows.

THU afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2060.75  2056.00 ...would target  2065.75  2061.00 Bias-down: under  2054.50 2049.75 ...would target  2050.25 2045.50 Signal status: NO-BIAS, TESTED BOTH BIAS SIGNALS, REJECTED 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.

Predictable and productive trending remains intact. This morning's 2052.50 bias-down target was still being overlapped at the bias environment exit. A retracement to its 2058.00 bias-down signal is required. Often, the 10:15 bias timing window print is also retraced at 2064.00. First things, first. Oversold RSIs at the 2048.50 low require its retest. That didn't prevent bouncing to 2056.50, but now 2052.50 is being tested as support. Also being tested is a sell signal at 2051.50. Not triggering it would make a higher bounce likelier. The bigger challenge is that this morning's potentially bullish setup (session-long rally) had formed but wasn't triggered, which should point down shrprly today.

Thursday's final hour didn't resume the session-long decline. But neither did it extend the afternoon bias environment's rally. And it missed an opportunity for the afternoon's rally to gain traction. The bias environment was exited above the noon hour's high, but the final hour wasn't entered above the bias environment's  2064.00 high -- and that's despite having probed higher to 2066.50 during the interim half-hour. The final hour fell back down to 2057.50, essentially unchanged vs. Wednesday's close. Having failed to gain traction, resuming the rally without delay Friday requires gapping up above Wednesday afternoon's 2066.50 high. Its simultaneously overbought RSIs require a retest, but so does oversold RSIs at the 2048.50 low. Details and other markets coverage are discussed in the post-market Wrap recording here.

Monitor overnight Globex trading in the chaRTroom here.

FRI morning signal (triggered at 10:15 ET) SPX ES Bias-up: above  2070.25 2065.75 ...would target  2077.00  2072.25 Bias-down: under  2060.00 2055.25 ...would target 2054.25 2049.75 Signal status: noN-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.