Real Time Market Updates and Trade Signals - 10-12-2015

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

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Through the prior close... .Friday's session ranged sideways widely, probing fresh highs above last month's 2011.75 prior high and retesting 2000.00 as support. But the close was essentially flat-to-positive above 2006.00, and no traction was gained either way Overnight action's new info... Gapping down slightly Sunday night then rallied gradually until touching Friday's 2012.50 high coming out of Europe's opens. A quick reaction down from there has been ranging more narrowly around unchanged at 2006.00-2007.00. If, then... Today is a Federal holiday that closes banks and bond markets. This reduces participation and liquidity, and therefore also volatility. Trending is difficult to get started, but also difficult to stop once begun. Probing last month's prior highs more significantly remains likely up to 2019.50. But not with any particular timing, so today is vulnerable to anything. First Trade... Exiting the open at 9:45 under 1999.50 would be likely also to trigger the 2001.00 bias-down signal at 10:15. Exiting the open above 2005.50 would be unlikely to trigger bias-down. Exiting the open above 2012.50 would be likely to trigger the 2011.00 bias-up signal... Remember that holding the test of a bias signal through 10:15 would put into play an offsetting test of the opposite bias signal.

Choppy ranging around unchanged. Nothing about the session pre-open had suggested trending about to begin. Plenty had suggested trending wouldn't succeed if attempted. So, trending to either end of the range was likely to react back to its other end. First trying to trend down would be likely to bounce from "lower prior highs" at 2003.50. The open's dip to 2003.00 snapped back up to test Friday's late 2008.25 high up to 2008.75. Those prior highs held, and "unchanged" at 2005.00-2006.00 attracted price right back down. An unpredictable swing has developed since then, albeit predictably within the range. Neither of the 2001.00 or 2011.00 bias signals has been touched, so there is no requirement for an offsetting test of the other. A fresh post-open low is now attacking the overnight lows, which are within 3 ticks of the 2001.00 bias-down signal. Breaking under it through 10:30 would invalidate that it had held through 10:15. Otherwise, this should be another end of the extreme, getting ready to bounce to (or through) the other end.

MON afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  2019.00 2011.00 ...would target  2024.00  2016.00 Bias-down: under  2012.00 2004.00 ...would target  2007.50  1999.50 Signal status: NO-BIAS 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)) Friday's surge didn't extend Monday, and barely enhanced intraday volatility. Gold Dec Contract (GC, ETF: (GLD)) Initially trending higher overnight to attack the 1169.00 target was retraced back to Monday's high, but not into negative territory, maintaining the rally's momentum. Silver Dec Contract (SI, ETF: (SLV)) Firming ahead of Monday's open still barely even attacked last week's 16.08-16.11 highs. But the session closed positive, keeping alive the recovery's momentum and its potential to become a new rally leg. 30-year Treasury Dec Contract (US, ETF: (TLT)) The cash market was closed for Columbus Day which continued to inhibit trending beyond either sell signal currently being tested. Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short)) Monday's dip attacking "lower prior highs" at or under 47.00 helps to confirm the recent surge wasn't sponsored by strong hands, but it doesn't yet reverse the trend down. That would be signaled by closing under 46.00. Natural Gas Nov Contract (NG, ETF: (UNG, UNL)) Flat narrow ranging didn't offer any early strength that would have been credible for extending higher intraday, and which still would be credible for extending higher intraday.

TUE morning signal (triggered at 10:15 ET) SPX ES Bias-up: above  2019.00 2011.00 ...would target  2024.00  2016.00 Bias-down: under  2012.25  2004.25 ...would target  2007.50  1999.50 Signal status: NO-BIAS, TESTED BOTH BIAS-DOWN 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.

Trending on Monday faced the large hurdle of a closed bond market. Historically, that inhibits risk hedging, which inhibits participation, which inhibits trending. Monday's session ranged almost as narrowly as Saturday and Sunday. The final hour tends to leave that behind and look forward to the oncoming influences. Monday's final hour did probe fresh afternoon highs above 2007.50 to 2010.00,  but post-close action has really come alive to probe 3 ticks above its 2012.50 overnight high. Breaking higher during Monday's final hour would have given away its weak-handed sponsorship. Even this post-close surge is vulnerable to reversing since it seems to be in reaction to a Fed speaker. But probing higher Tuesday has no reason not to test the outstanding 2019.50 objective before reversing down. Details and other markets coverage are discussed in the post-market Wrap recording here: https://roddavid10.mitel-nhwc.com/join/vsxhpkt

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