Real Time Market Updates and Trade Signals - 02-24-2015

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''s fifth consecutive gap down triggered the bias-down signal for the second time, but without already having fulfilled its target like Friday had. That still didn''t suffice for sellers to take control, as the signal was invalidated by exiting the bias environment above the open''s high. Despite having absorbed sellers, buyers never left negative territory -- not until the last half-hour''s surge back to Friday''s 2108.50 high. The surge reversed yet another probe under 2101.50 support which I was expecting to drop by as much. Oversold RSIs were left outstanding.

Overnight action''s new info...
Monday''s choppy 7-8 point session was relatively narrow compared to Friday''s 26-point range. Last night''s 3-point range was narrower. Both share the same high, 1 tick short of Friday''s highs.

If, then...
"Ineffectual pessimism"? Hovering at the highs without either probing above them or reacting down eventually makes higher highs obligatory. That is, buyers must be rewarded for their effort. But that reward isn''t necessary substantial or durable, not unless another dip were to develop first. The anti-Grexit headlines have taken the lead from yesterday''s worrisome delay in Greece''s announced reforms." The new source of anxiousness is FOMC Chair Yellen''s Senate testimony, whose remarks are normally embargoed until 10:00am.

First Trade...
Exiting the open at 9:45 above 2111.00 would make the 2108.50 bias-up signal likely to trigger at 10:15. Exiting the open under 2104.25 would be unlikely to trigger bias-up, and under 2101.50 would be likely to trigger the 2102.50 bias-down signal.

Bumpy ride visiting both extremes.

The 2108.50 bias-up signal didn''t trigger. The grace period was almost invoked, touching the bias-up signal within 1 minute of being within 3 minutes of the 10:15 trigger, and then within 1 tick within those 3 minutes. Neither condition qualifies for invoking the grace period.

But regardless of invoking the grace period, later exceeding the bias-up signal through 10:30 can still invalidate the 10:15 signal. In fact, fresh highs up to 2111.75 did just that. The no-bias signal is invalidated.

Being invalidated, the 2114.50 bias-up target isn''t necessarily in-play. It won''t become "unfinished business above" if not yet met when the bias environment begins lapsing at 11:30. But 2113.75 and potentially 2115.25 are in-play according to the opening swing''s measurements.

Describing the tortured test of the bias-up signal should acknowledge its earlier reaction down that was sparked by Yellen''s remarks. The drop wasn''t arbitrary, coming to within 1 tick of the 2102.50 bias-down signal. Almost all available selling pressure was expended without gaining any traction for the effort. Buyers were almost fully refueled. If they can''t maintain this probe of new highs, then they''re done.

So, the origin of trending up above prior highs requires entering the noon hour above prior highs. The alternative would reverse the trend back down intraday.

TUE afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2117.75
2115.25
...would target 2123.50
2121.25
Bias-down: under 2109.00
2106.75
...would target 2104.00
2101.50
Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL 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))
Choppiness during Yellen''s testimony Tuesday neither reversed the trend nor resumed it. But not exploiting the opportunity to resume the trend at this pivotal level does suggest the pattern is under accumulation..

Gold Apr Contract (GC, ETF: (GLD))
Monday''s test of the 1191.50 target wasn''t credible because it only printed overnight, and negative territory was altogether avoided intraday. Tuesday''s retest of Monday''s low had also reacted up above 1197.50, twice, at least suggesting that the decline has ended. A bounce has room up to 1212.00 before signaling a rally is underway.

Silver Mar Contract (SI, ETF: (SLV))
Expending so much energy to avoid probing again back under last week''s lows only made support indefensible. Tuesday morning''s narrow ranging finally broke lower to retest Sunday''s overnight lows, so any lower low is likely to extend the trend.

30-year Treasury Mar Contract (US, ETF: (TLT))
Monday''s close above 144-30 didn''t waste time Tuesday extending to the 146-14 minimum corrective bounce target, with there still being room up to 147-00 before suggesting a bigger rally is actually underway, and room for a pullback to 145-24 before signaling the bounce has ended.

Crude Oil Apr Contract (CL, ETF: (USO, UWTI))
Tuesday continued ranging within the 49.00-50.50 rock and a hard place. Delaying the probe''s recovery doesn''t help to form a bottom, which needs to begin aggressively to be credible.

Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Firming Tuesday was in-line with expectations that Monday''s dip to "lower prior highs" would ultimately hold and recover to fresh highs. But it didn''t gain traction for resuming the rally, which now would be signaled by breaking above Tuesday''s high.

WED morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2117.75
2115.50
...would target 2124.25
2122.00
Bias-down: under 2109.50
2107.25
...would target 2103.75
2101.50
Signal status: NO-BIAS 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.

If another session were to mimic Tuesday''s... then a new downleg could be obvious within hours of that. Probing new highs without gaining traction isn''t the problem -- except for sessions that develop almost exclusively above all prior sessions'' highs.

Pattern points... (Setups and technicals)
Although Tuesday morning''s bias-up wasn''t triggered, its 2114.00 target was pierced by 1 tick. So was its potential for being probed up to 2115.25 at the afternoon''s peak.

Buyers gained no traction for the effort, since the bias environment was exited within noon hour''s range. That''s not necessarily bearish -- the final hour''s entry was above both and the 3:10-3:20 timing window trended through the morning''s prior high, so sellers were prevented from gaining traction. 

The rally stumbled at  the close, too. Despite probing a fresh session high, the morning''s high was still being overlapped. So, not already trending down at Wednesday''s open could spend the morning probing fresh highs.

Overbought RSIs at the 2115.75 high will require a retest, despite the late 3-1/2 point reaction down. Neutralizing the retest overnight is the only credible path down Wednesday morning. Otherwise, trading down first, or not already reacting down from 2115.75, could marginalize sellers into the afternoon.

What''s Next... (Outlook and opportunities) Very little of Tuesday''s session probed back into a prior session''s range. The morning''s bias timing window was spent under prior highs, but a break higher rejected it during the first hour. The noon hour''s momentary dip was recovered to fresh highs. And, yet, the rally gained no traction for the efforts. This observation tends to appear before substantial reversals, even if the reversal proves only temporary.