Real Time Stock Market Trade Signals - 09-29-2015

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

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Through the prior close... Ready, set, sell. Monday welcomed us back with an almost immediate resumption of Friday's decline from its 1951.00 pre-open highs. Last week's 1897.00-1899.00 lows were retested overnight. Sliding through late-afternoon attacked 1869.00. Sellers didn't gain traction, but created potential at least down to 1864.00. Overnight action's new info... Lower lows ahead of Europe's opens had already probed 3 points under 1864.00 and then back above it. Its reaction up extended at a steep slope to 1886.00. That's yesterday's noon hour high, literally the afternoon's high... retraced, but not (yet) rejected. If, then... Despite potential for extending down to 1864.00 or lower, "hold-short" wasn't contemplated. That was ruled out by yesterday afternoon's sellers not gaining traction, so fulfilling the target overnight could still recover into the open. In fact, that has happened, but it doesn't mean the trend is reversed up. Not without recovering some relevant level through the open, which will depend upon what relevant level is touched. For example, a post-open probe above yesterday's 1886.00 noon hour high that isn't extending at 9:45 would become likelier to launch an attack on overnight lows. Otherwise, extending higher this morning wouldn't likely extend for much longer than that, which would be unusual following yesterday's session-long downtrend. First Trade... Exiting the open at 9:45 above 1886.00 would be likely also to exceed the 1887.25 bias-up target at 10:15 to renew the bias-up signal. Exiting the open above 1883.75 would be likely at least to trigger the 1881.50 bias-up signal at 10:15. Exiting the open under 1875.00 would be unlikely to trigger bias-up.

The get out of stocks crowd got in and got out. I had planned to sell an opening surge's reaction down from 1887.00-1889.00, not much lower than 1974.00-1975.00 if needed. Its objective was a probe under yesterday's lows, which was all but required since the session-long downtrend can only produce a momentum low -- not the actual low. My plan worked perfectly, except that the open was greeted by a slide already testing 1974.00-1975.00. It offered little support before extending to fresh lows at 1865.75. Only afterward did a bounce test 1887.00-1889.00.

Structurally, just probing under yesterday's low allows the decline to end. Even in the most bullish scenario, yesterday's session-long downtrend low could serve only as a momentum low requiring a retest. A multi-session bounce is free to develop.

Free to develop, and yet to develop. Potential down to 1864.00 wasn't necessarily satisfied by testing it only overnight. Oversold RSIs at today's 1866.00 post-open low would probably include its retest.

TUE afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  1896.00 1886.00 ...would target  1902.25  1892.25 Bias-down: under  1882.25  1872.25 ...would target  1876.00  1866.00 Signal status: LATE NO-BIAS, TESTED BIAS-DOWN 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.

Reacting to the noon hour piercing negative territory. This morning's recovery from fresh lows hasn't dragged bulls out from their hiding places. The bounce back up to 1889.00 resistance reacted back down to 1868.50. That's 3 points under yesterday's cash session close. It was also under the 1872.25 bias-down signal, which recovered in time to trigger "late no-bias." "No-bias" allows room up to this afternoon's 1886.00 bias-up signal. It's not required to use all that room, and it wasn't -- natural resistance at a 61.8{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} of the downleg held at 1881.50. Now the bias environment is lapsing, and the choppiness should end. Retesting the 1872.25 bias-down signal as support has reacted up to 1879.00. It reacted up aggressively which is appropriate if momentum is reversing up.

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)) Monday night's probe above 1.1265 was repeated intraday Tuesday and ultimately probed into late-afternoon, which undermines resuming the decline unless rejected aggressively without delay. Gold Dec Contract (GC, ETF: (GLD)) Lower lows overnight were repeated intraday, keeping in-play potential down to 1117.00, which would be confirmed under 1125.00. Silver Dec Contract (SI, ETF: (SLV)) Narrow ranging Tuesday held above 14.50 to avoid putting into play fresh lows under 14.20, and still allowing a close above 14.65 to signal the pullback had ended. 30-year Treasury Dec Contract (US, ETF: (TLT)) Fresh highs overnight at 158-00 were reversed in time for Tuesday's open to gap down, but that didn't prevent retesting overnight highs intraday. The rally remains more vulnerable to extending than to collapsing during a flight-to-quality, and until closing back under 156-16. Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short)) Trading firmer Tuesday didn't recover the 46.00 bounce limit that keeps 42.80 in-play below. Natural Gas Nov Contract (NG, ETF: (UNG, UNL)) Retracing back into the range Monday after gapping up above it left "unfinished business above" at its opening print. That didn't prevent probing the range's 2.63 lower-end intraday, down to last Thursday's EIA knee-jerk reaction down to 2.59. Closing back above 2.63 would signal the range's lower-end was still holding, and potentially launching a rally leg.

WED morning signal (triggered at 10:15 ET) SPX ES Bias-up: above  1896.00 1886.00 ...would target  1902.00  1892.00 Bias-down: under  1877.50  1867.50 ...would target  1872.00  1862.00 Signal status: BIAS-UP, BIAS-UP 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.

Tuesday's late bounce from the 1861.50 low extended up to the 1877.00 bias environment exit. That's natural resistance and there's nothing unnatural about testing it before resuming the decline. Of course, extending the late rally makes it easier to recover higher levels that would delay rewarding Tuesday's sellers for gaining traction. The burden of that proof is on buyers. Meanwhile, the late bounce essentially expended all possible buying pressure during a window when it could not gain traction for the effort. That's the stuff of weak hands, like the impatient buyers that caused the afternoon's drop to stop optimistically short of touching the overnight low 2 ticks lower. And that's bearish from a contrarian perspective. Rewarding Tuesday's sellers can begin overnight, within limitations. Details and other markets coverage are discussed in the post-market Wrap recording here: https://roddavid10.mitel-nhwc.com/join/htpbzcz

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