Real Time Market Updates and Trade Signals - 01-07-2016

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

CHARTROOM LINK(s) o New! Omnistream o Anymeeting backup (pre-open Market Tour begins at 8:55 ET)

Through the prior close... Wednesday's gap down back under Monday's low to 1977.00 was already recovering from lower lows overnight. The recovery extended through the morning back up to 1995.00 -- almost convincingly. Equilibrium reversed the rally down to new lows under 1971.00. Regardless of being convincing, sellers had gained traction. And regardless of the decline gaining traction, the last hour rallied back up to 1984.00. Overnight action's new info... The last-hour's rally extended hopefully into the Globex open, hesitating at 1991.00 ahead of China's open. Ahh, China's open. Its immediate plunge and immediate halt triggered a drop under Wednesday's lows to 1961.00-1962.00. That 30-point drop eventually doubled down to 1931.00. Three hours later, price has firmed up to 1944.00. If, then... Extending yesterday's initial 40-point decline intraday would have doubled it. Delaying it didn't prevent it, and delaying it didn't delay it for very long. Is the drop hurrying itself down to a bottom, or posturing itself to triple itself? Probably the latter -- buyers are becoming increasingly conditioned to the new trend, and the weekend's illiquidity is fast-approaching. The next lower objective is 1912.00 with room for noise down to 1907.00. Rallying first anyway would find resistance at 1954.00-1956.50. I have no active templates at this stage that contain a path to recovery before extending down sharply, presumably for the long-awaited duplication and magnification of August's plunge. TGInyF (thank goodness it's not yet Friday). First Trade... Exiting the open at 9:45 above 1949.00 would be likely to extend its bounce up to 1954.00-1956.50. Exiting the open at 9:45 under 1937.25 would be likely to resume the decline to fresh lows.

Another post-open bounce that isn't likely durable. The pre-open bounce's post-open reaction down held 1945.00 to maintain its upside momentum targeting 1954.00-1956.50. The target's pullback limit held, and the rally extended to 1961.00. Its reaction down to almost 1951.00 lasted almost long enough to seal a top. But it was recovered by enough by 10:15 to marginalize sellers before extending the bounce to 1965.25-1966.50. The target's lower-end was just touched. Back under 1959.00 would start to signal momentum reversing down. Reversing momentum back down could be limited to attacking the 1948.50 open. Any lower would start to signal fresh session lows and lower are in-play. Meanwhile, the gap down's post-open bounce has prevented conditioning market participants to be pessimistic. Not closing substantially higher will condition the market to sell gaps down -- like the one being suggested for tomorrow by the active template.

THU afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  1973.25 1965.25 ...would target  1978.50  1970.50 Bias-down: under  1959.00  1951.00 ...would target 1952.25  1944.25 Signal status:BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED 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.

Gap-down buyers learning to get out sooner. The 1948.50 open rallied 21 points to 1969.00. That's bigger than yesterday's post-open 17-1/2 point rally. But it's weaker, in two regards. First, yesterday morning's gap down was bought almost all the way through the morning's bias environment. This morning's rally peaked at least 20 minutes sooner. Second, while both reactions down ultimately extended back under their opening prints, yesterday's probe came during the afternoon bias environment lapsing. Today's probe under the morning's low has come during the afternoon bias environment's entry. The latest sell signal triggered under 1963.25 before the morning's bias environment began lapsing. It has already produced a 29-point drop to 1934.00. If sellers are being conditioned alongside buyers, then they'll be increasing pressure --

-- especially as the weekend's illiquidity approaches exponentially faster with each passing minute. Steeper selling into 1932.00-1939.00 target area suggests the conditioning is complete.

All of Thursday morning's rally from its 1945.00 low up to 1969.00 was retraced before entering the afternoon bias environment. The 1931.00 overnight lows were retraced entirely, too. But that last bit came after the 3:10-3:20 timing window. Sellers are still hesitant. Still reluctant. Optimism isn't necessarily alive AND well, but it's alive. And that's still bearish from a contrarian perspective. Greeting Friday's pre-open Employment Situation report even more optimistically can't be discounted. An initially favorable knee-jerk reaction can't be discounted. But there's about 15 points of room for noise above Thursday's close to 1948.00-1951.00 without even beginning to reverse the trend up. And there's a whole weekend of illiquidity just several hours following the news. The next lower likely support is at 1907.00-1912.00. But the market still isn't tracking any recovery template, and this is all in the context of presumably duplicating and magnifying August's plunge. 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  1950.50 1942.50 ...would target  1956.00  1948.00 Bias-down: under  1935.25  1927.25 ...would target 1929.00  1921.00 Signal status: NO-BIAS, TESTED BOTH BIAS-UP PARAMETERS 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.