Real Time Market Updates and Trade Signals - 03-01-2016

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... Recovering an overnight dip down to 1928.00 enabled a relatively flat open around 1946.00. Extending 10 points higher probed Friday's range up to 1956.00 Despite starting a little late to be durable, the rest of Friday's range could have been retraced, too. Never mind that, an afternoon slide fell back down to overnight lows, gaining traction for its effort. Overnight action's new info... Lower lows soon came within 3 ticks of critical support at 1920.00. But the balance of the night has rallied, eventually testing yesterday's open around 1946.00. Its reaction down has recovered to momentarily attack 1948.00. If, then... I gave yesterday morning's late rally too much credibility for being able to extend through 1952.00-1953.00. The afternoon slide earned more credibility than I had given it, not only fulfilling its potential to retest 1933.00, but then also retesting 1930.00. Now the overnight rally is threatening that credibility. Much can happen in this pattern before the open. But just gapping up above 1943.00 could negate rewarding yesterday afternoon's sellers with control of this morning's bias environment. Gapping up above 1951.00 would be the optimal rejection, targeting a retest of 1969.00. First Trade... Exiting the open at 9:45 above 1948.00 would be likely also to exceed the 1946.00 bias-up target at 10:15 to renew the bias-up signal. Exiting the open above 1944.00 would be likely to trigger the 1940.25 bias-up signal at 10:15. Exiting the open under 1937.75 would be unlikely to trigger bias-up.

Delayed recovery of resistance nevertheless extends higher. Recovering (or not) 1943.00 through the open could have been predictive of the morning. It was tested and probed pre-open. The open pierced it only momentarily. And then a reaction down tested 1938.50. And retested it. Meanwhile, 1943.00 wasn't recovered through the open. But was testing and retesting 1938.50 a sufficient offset? We discussed that question in the chaRTroom while leaving the door open to a buy signal. It triggered above 1943.75. Bias-up triggered easily, and despite holding the 1946.00 bias-up target's test through 10:15, a surge just touched yesterday morning's 1956.00 high.

Reversing down from here would leave no "unfinished business above" to prevent extending a downleg. Reversing down from here would be signaled by exiting the morning's bias environment back under its 1946.00 bias-up target.

Meanwhile, a pullback has room down to 1951.00. Not reversing down would be likely to accomplish what yesterday morning's late weak-handed rally did not -- retesting Friday's 1968.75 pre-open high.

TUE afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  1968.50 1966.00 ...would target  1973.50  1971.00 Bias-down: under  1961.25  1958.75 ...would target 1955.50  1953.00 Signal status: 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.

Attacking Friday's pre-open high. Testing and holding the 1946.00 bias-up target through 10:15 often identifies the morning's peak. Not always. It's still a bias-up environment, so not renewing the signal doesn't prevent extending higher anyway. And extending higher was likely. In fact, the 1951.00 renewed bias-up target was exceeded back to yesterday's 1956.00 high, and a pullback there resolved up to attack Friday's 1968.75 pre-open high.

Stopping 3 ticks short of touching 1968.75 is pessimistically short. That's potentially bullish from a contrarian perspective, which keeps alive the upside. The next higher objective is not very far above at 1971.00 (+/-, probably +).

The base that launched this morning's rally may be more productive than yesterday's. But it's no more durable. This afternoon remains as vulnerable as yesterday to trending back down.

WED morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 1979.50  1977.00 ...would target  1985.00  1982.50 Bias-down: under  1968.50 1966.00 ...would target  1963.00  1960.50 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.

Retesting Friday's 1968.75 pre-open high had targeted 1971.00. Its test held initially, but was probed eventually by 7 points up to 1975.75. That's a good example of thoroughly testing a target. Reacting down probed under 1971.00 by 1 point. That's the definition of an attractive target. Surging into the cash session close attacked  the 1975.50 high. Surging into the futures close to touch 1978.50 only reflects a short-squeeze. The original probe above 1971.00 has yet to be exceeded when it matters.

Having trended up into the close, gapping down under the bias environment's 1966.50 low could form a "session long decline" setup which hasn't been seen in awhile. And with every leg still overlapping 1971.00, no "unfinished business above" would be left outstanding.

Being vulnerable to reversing down is not a requirement. Not trending back down Wednesday would next target 1993.00, and potentially 2012.00-2014.00.

Details and other markets coverage are discussed in the post-market Wrap recording here.

Monitor overnight Globex trading in the chaRTroom here.