Real Time Stock Market Trade Signals - 02-17-2015

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...

Friday morning''s retest of December''s highs fulfilled two requirements. It was the minimum likely resolution of the two-week old rally, while it also rewarded Thursday afternoon''s buyers for having gained traction. The afternoon''s slide to 2082.75 threatened to leave positive territory. But that only stretched the rubber band for rallying to fresh highs at 2095.00 into the weekend.

Overnight action''s new info...
Don''t blink, you''ll miss it. Sunday night''s open immediately slid 6 points. News from the Eurogroup talks kept the session under pressure through Monday morning. A late hopeful blip-up attacked Friday''s high, but its hopes were quickly dashed by contradicting headlines that triggered a plunge attacking Friday afternoon''s low. Lower lows at last night''s open probed under Friday afternoon''s low, twice. But hope springs eternal, and it sprang again soon after Europe''s opens, now attacking Friday''s high to within 2 points.

If, then...
A 7-point drop after Friday''s close was followed by a 12-point drop. And this morning''s open is indicated to open down only 2-3 points. That recovery might not hold, or it might yet extend. Overnight patterns rarely influence intraday price action, and these even less so. Sellers weren''t the strong hands that act during liquid environments. Unless bias-down is warned or triggered, we''ll assume the holiday''s round trip reinforces the rally''s intent to probe fresh highs.

First Trade...
Exiting the open at 9:45 above 2091.00 would be unlikely to trigger the 2087.50 bias-down signal 30 minutes later at 10:15. Exceeding 2097.50 through the open would be likely also to trigger the 2095.75 bias-up signal. But failing to hold 2085.50 would be likely to trigger the 2087.50 bias-down.

Weekend sellers have gone into hiding.

The opening 15 minutes of volatility through 9:45 had tested 2091.00 but held it, making the 2095.75 bias-up signal unlikely to trigger.

The opening 45 minutes through 10:15 had tested the 2087.50 bias-down signal but held it, putting into play an offsetting test of the 2095.75 bias-up signal.

Having round-tripped down to 2086.25 on the way up to 2092.25, natural support is at 2088.50-2089.25. A dip is testing that now. Back above 2091.50 would signal that the pullback had ended and that momentum targeting fresh highs had resumed.

Meanwhile, the bias parameter can be invalidate only by exiting the bias environment at 11:30 under the open''s 2086.25 low. 

TUE afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2098.25
2095.75
...would target 2104.00
2101.50
Bias-down: under 2091.00
2088.50
...would target 2087.00
2084.50
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 Mar Contract (EC, ETF: (FXE))
Fluctuation doesn''t accurately describe Sunday night and Monday''s choppiness. But it was all recovered before Tuesday''s open. The balance of the session only ranged narrowly sideways, still needing a close above 1.1455 to trigger another breakout.

Gold Apr Contract (GC, ETF: (GLD))
Thursday''s "ineffectual optimism" didn''t immediately launch a decline Friday, and neither did Friday''s, which went out testing the 1226.50 bounce limit. But sharply lower lows through Tuesday down to 1203.30 confirm the decline''s momentum remains intact, still targeting 1185.00-1195.00.

Silver Mar Contract (SI, ETF: (SLV))
Friday''s single-day surge to fresh highs had originated from an unstable base, which became obvious by Tuesday''s open rejecting the surge entirely back to Thursday''s 16.77 close. The balance of the opening action trended down to fresh lows at 16.25, next targeting 15.80.

30-year Treasury Mar Contract (US, ETF: (TLT))
The next lower target at 144-18 was test Tuesday''s morning, and then broken on the way to piercing 144-00. An afternoon bounce was challenging 144-18 from below, but now a recovery must close above 144-30 to be credible.

Crude Oil Mar Contract (CL, ETF: (USO, UWTI))
Tuesday morning''s slide to 50.80 filled the gap back down to Thursday''s 51.25 close. Rallying more than $3 from there once again pierced the twice-tested 54.00 highs. There is no bearish reason for the retest at this stage of the pattern, so extending higher without delay is likely.

Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
.Gapping up Tuesday didn''t extend higher, and the morning pulled back to test the original 2.70 buy signal as support. Its reaction didn''t recover positive territory, but Wednesday morning should rally through 2.81 for optimal confirmation the pullback was only temporary.

If the rally has neutralized all upside requirements... then it is vulnerable to reversing down as sharply as it got here. No reversal signal is yet in play. But Tuesday''s new high close did neutralize one upside attraction. And Tuesday afternoon did probe fresh highs without gaining traction for the effort. Meanwhile, FOMC Minutes is released Wednesday afternoon, and expiration is Friday.

Pattern points... (Setups and technicals)
Tuesday morning was a great example of all the methodology''s parts coming together to produce a likely resolution. Actually, that belongs more to Tuesday afternoon. The morning was a great example of all the methodology''s parts offering context, and challenging that context along the way to their likely resolution.

First Trade and Market Wrap reiterated the bigger picture likelihood for extending the rally. That context made the bias down signal unlikely to be triggered if tested. It was tested, and didn''t trigger.

Testing but not triggering the bias-down signal puts into play an offsetting test of the bias-up signal. That objective becomes a requirement if not yet met when the bias environment is lapsing. When knowing the likely destination is higher, pullback limit tests can be held more confidently -- if not also bought.

What''s Next... (Outlook and opportunities)
Tuesday afternoon''s bias-up signal triggered, and its 2101.50 target was left outstanding. That context suggests that any immediate pullback would be only temporary.

WED morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2103.25
2100.75
...would target 2108.25
2105.75
Bias-down: under 2092.50
2089.00
...would target 2087.00
2084.50
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.