Real Time Market Updates and Trade Signals - 09-25-2015

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

CHARTROOM LINK(s) o Win XP-Friendly entry o non-xp friendly (ilinc) (pre-open Market Tour begins at 8:55 ET)

Through the prior close... Thursday's open under 1918.00 had put into play 1899.00. Meeting it, and gapping down, reflected a lot of pessimism. Isolating that sentiment to a single timing window prevented new sponsorship so we could anticipate a bottom. Recovering through the afternoon well above the morning's highs attacked 1927.00. And buyers gained traction for their effort to suggest more upside. Overnight action's new info... Initially blipping down to 1913.00 was recovered as quickly to attack 1928.00. Sideways ranging finally started breaking higher after midnight. A brief consolidation up to 1941.00 is now being tested as support, following an interim spike up to 1951.00. If, then... One obvious question this morning is whether the bullish scenario is fulfilled already. Rallying 54 points in 18 hours doesn't confirm the 1899.00 objective's significance, any more than the decline's big bounces off of its 1938.00 and 1918.00 objectives. Much more revealing than its size is that last night's bounce is probing above prior sessions' highs, something which the prior bounces did not. One other obvious question is whether the overnight 25-30 point rally already has rewarded yesterday afternoon's buyers for gaining traction. This being a Friday, that answer could define much of the day's direction. First Trade... Exiting the open at 9:45 above 1938.00 would be likely also to exceed this morning's 1936.25 bias-up target at 10:15 to renew the bias-up signal.

Overnight rally is correcting post-open. The pre-open pullbacks down to 1938.00-1939.00 broke lower to attack this morning's 1931.00 bias-up signal to within 3 ticks. Its reaction up to 1939.50 reversed down to fresh lows at 1930.75. Bias-up triggered along the way. Its bias-up target and renewed bias-up targets had been tested pre-open. But this is still a bias-up environment. Probing a resh low would be understandable, but not required in order to rally.

FRI afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  1949.00 1938.00 ...would target  1956.00  1945.00 Bias-down: under  1942.00  1931.00 ...would target  1936.50  1925.50 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.

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 Sep Contract (EC, ETF: (FXE, UUP)) Gapping down sharply Friday helped to confirm that Thursday did contain the corrective bounce's peak. But the gap also created room for another slight bounce while awaiting the eventual third lower close in-play. Gold Dec Contract (GC, ETF: (GLD)) Thursday's runaway rally had already indicated its momentum was peaking before Friday's open gapped down to test the 1141.50 prior highs as support. The inside day should next extend down to 1129.50-1134.00 and before filling the gap back up to Thursday's close. Filling the gap first would be more toppy. Silver Dec Contract (SI, ETF: (SLV)) Thursday's rally had stopped pessimistically short of filling the gap back to Monday's close, so Friday's reaction down recovered entirely back to Thursday's highs. 30-year Treasury Dec Contract (US, ETF: (TLT)) Gapping down Friday formed an Island of Thursday's gap up that had held its resistance. Filling the gap back to Thursday's close would be bearish instead of extending down first to test 153-24 support. Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short)) Flat-to-higher ranging Friday didn't even bother trying to invalidate the decline underway, still targeting 42.80. Natural Gas Oct Contract (NG, ETF: (UNG, UNL)) Friday's inside day gapped down to probe the same 2.56 prior lows that Thursday's dip had recovered, ending the day hovering around it. The price action doesn't equate to being a buy signal, but any initial strength Monday would be credible for extending higher intraday.

MON morning signal (triggered at 10:15 ET) SPX ES Bias-up: above  1936.25 1925.25 ...would target  1941.00  1930.25 Bias-down: under  1924.75  1914.00 ...would target  1919.25  1908.25 Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED 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.

[Quick links to the post-market Wrap recording. and to Monday's morning bias parameters.] I should think the title says it all. I wish. But, no, I was absolutely looking for the typical Friday ranging to resolve in a typical Friday afternoon rally into the close. And I was caught flat-footed. The session's gap up had not been rejected, the overnight high had not been retested, and the afternoon's bias-up had triggered. What's down? The bias environment had not improved since moments before triggering bias-up at 1:20. Had the bias environment lapsed still without improving, then I would have placed a short-entry. Had the bias environment's lapsing only come within view 10-15 minutes out. Had the selling only waited. Instead, the plunge began with half the bias environment remaining. And I do mean plunge. Price wasn't gradually drip-drip-dripping lower, finally breaking the dike. That torture would have been merciful for at least offering clues. No, the first downticks were among the deepest.  At least that unseemliness prompted me to tell the chaRTroom the drop had better stop and recover abruptly to maintain potential for fresh session highs. That potential was never to be seen again.

Dropping 27 points in one hour isn't too shabby, for not having even hinted at its vulnerability. No hint, not beyond it being a Friday afternoon. Perhaps the week's most unpredictable timing window is becoming more predictable. Recall how last Friday's expiration fulfilled its bullish bias, by absorbing dips. And the moment the anxiousness of weekend exposure had subsided, Sunday night rallied sharply and extended even higher through Monday morning.

Rallying out of this weekend would be similar to the prior Friday's head-fake bullishness. Anxiousness ahead of weekend illiquidity is pessimism, which is often bullish from a contrarian perspective. Often, but not always. Pessimism is like paranoia, and sometimes they really are following you starting the next crash leg.

Details and other markets coverage are discussed in the post-market Wrap recording, which is extended to include a bigger picture review, here: https://roddavid10.mitel-nhwc.com/join/htpbwfy REMINDER: THERE IS NO SATURDAY REVIEW THIS WEEKEND.