Real Time Stock Market Trade Signals - 03-08-2016

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... Monday's price tracked perfectly with the topping pattern described during the Saturday Review. Gapping down shallowly and recovering into positive territory, then closing only slightly positive. No higher objective was left outstanding. Overnight action's new info... Only downtrending has defined price action since yesterday's close. Soon sliding 12 points back down to attack Monday's 1988.25 afternoon low, then resolving a shallow bounce to fresh lows to 1980.75. Perhaps it was only a "warning shot across the bow," as a bounce back up to yesterday's 1986.00 low  has surged further up to 1994.00. If, then... The topping patterns isn't just optimal -- it's perfect. That always makes me suspicious, but I'll give it a benefit of the doubt until proved otherwise. The actual capitulation -- the sudden exponentially growing mass realization that the music has stopped -- should not become obvious until Tuesday afternoon or Wednesday morning. Last night's fresh low under Friday and Monday's lows is acceptable as a warning shot, and should be followed by one last gasp up into the range. Already trending down this morning would still get that benefit of the doubt, and also a dose of suspicion. Regardless, only a strong rally would start to disqualify the topping pattern. First Trade... Exiting the open at 9:45 under 1984.00 would be likely also to trigger the 1985.00 bias-down signal. Exiting the open above 1988.00 would be unlikely to trigger bias-down.

Shallow bounce resolves in fresh lows. We've been tracking a potential topping pattern, and its final optimal condition is being challenged. Rather than bounce throughout this morning, to whatever degree, the bias environment is probing lower and lower lows. In fact, the 1991.00 bias-down signal was renewed by exceeding the 1985.00 bias-down target through 10:15. Already 1979.00 has been tested. Twice. Exiting the bias environment and entering the noon hour back above the bias-down parameters would undermine the topping. So would rallying this afternoon instead of declining. Otherwise, while the impatience might reflect weak-handed sellers, the trend change may be affected only in its timing.

TUE afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  1993.25 1991.00 ...would target  1999.75  1997.50 Bias-down: under  1982.50  1980.25 ...would target 1977.00  1974.75 Signal status: noN-BIAS, TESTED BIAS-UP 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.

Still monitoring for capitulative downleg. The reaction up from this morning's 1977.50 low has touched 1993.00. That's the highest post-open print and its still 6 points into negative territory. Anything higher would suddenly become much likelier to probe fresh highs, like 2009.00. Otherwise, this now being Tuesday afternoon, a downleg can now be obvious. If not today, then tomorrow morning.

The late-afternoon's relentless downtrending extended from the 1993.00 session high to probe under the 1977.50 morning low by 6 ticks. The cash session close equated to 1977.25, bouncing almost 4 more points into the futures close. Sellers gained traction not be exiting the bias environment under the noon hour's low, but by trending down lower through the final hour entry and the 3:10-3:20 window. Gapping open Wednesday above the final hour's 1986.50 high could invalidate that traction. Otherwise, not. Having trended down through the cash session close, gapping up above the afternoon's high could form a "session-long rally." Opening any shallower would likely trend down much more aggressively. Details and other markets coverage are discussed in the post-market Wrap recording here.

Monitor overnight Globex trading in the chaRTroom here.

WED morning signal (triggered at 10:15 ET) SPX ES Bias-up: above  1988.25 1986.00 ...would target  1995.25  1993.25 Bias-down: under  1979.00  1977.00 ...would target 197.00  1971.75 Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL 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.