Real Time Stock Market Trade Signals - 10-19-2016

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... Rallying 18 points overnight into Tuesday's gap up didn't prevent the open's 10-point drop to 2129.00. But it did help to absorb it, and almost all of it was recovered back to 2138.50 by noon. The noon hour and afternoon's no-bias environment hovered narrowly between 2135.00-2137.50 just under the pre-open and post-open highs. The final hour finally started trending -- down -- meeting its 2130.50 target into the futures close. Overnight action's new info... Initially rallying overnight to 2135.50 held up through midnight. It was all retraced into Europe's opens, on the way to probing under Tuesday's lows down to 2126.50. But not for long. A bounce quickly recovered back into Tuesday's range, briefly probing into positive territory above 2133.00. If, then... Enough time was spent Tuesday hovering pessimistically short of retesting prior highs for it to be considered pessimism. That context, and the late drop's timing, suggest sellers were weak-handed. All of which would be irrelevant if Wednesday's open were to maintain an immediate break under Tuesday's low. Having threatened that overnight, recovering to gap up Wednesday would be that much more bullish -- gapping up above Tuesday afternoon's 2138.00 high would form a "session-long rally" setup. Breaking under Tuesday morning's 2129.00 low to resume the overnight decline would essentially resume last week's declines, too. First Trade... [Click here to view the Bias parameters] Exiting the open at 9:45 under 2128.50 would be likely to trigger the 2130.50 bias-down signal at 10:15. Exiting the open above 2133.25 would be unlikely to trigger bias-down. Exiting the open above 2137.50 would be likely to trigger the 2136.50 bias-up signal at 10:15.

Snuck in another dip before finally resolving up. A credible post-open downleg would begin immediately. That was its only requirement. Starting quickly was worth already damaging the chart to signal its strength. So, gapping open in positive territory, and then blipping-up momentarily to 2137.25, disqualified the slow drift back down to 2133.00 from being credible. It would have to be more productive and damaging first. Meanwhile, its sponsorship was assumed to be weak-handed. Two problems, minor, but problems. First, the slow drift back down to 2133.00 probed it by 3 ticks. Never any deeper than its first 3 minutes, a problem that could be overcome easily. Which it was, by bouncing back above 2134.50 and extending higher. The second problem was no-bias had triggered, AFTER testing the 2136.50 bias-up signal. That had put into play an offsetting test of the 2130.50 bias-down signal. And the bounce back above 2134.50 didn't extend quickly enough to invoke the grace period. That required a rare invalidation, by recovering the 2136.50 bias-up signal through 10:30. Not still overlapping it then, but exceeding it at 10:30 as cleanly as it had failed to trigger at 10:15. Which happened. Problem(s) solved. This morning's 2141.50 bias-up target didn't require a test, but it has been attacked to within 1 tick. That was also the likely consequence to yesterday's mid-day "ineffectual pessimism," regardless of its deeper drop. Maintaining the upside momentum would next target 2145.50 and 2150.00. At least one of which is likelier than launching new downleg, since overbought RSIs at 2141.25 require a retest.

WED afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  2146.50 2140.50 ...would target  2151.50  2145.50 Bias-down: under  2141.50  2135.50 ...would target 2136.50  2130.50 Signal status: LATE 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.

Buyers less patient. Yesterday's post-open dip was deep and recovered entirely. Almost entirely. And then a deeper dip developed overnight. Recovering that deeper dip into the open didn't prevent another post-open dip. But it was much shallower than yesterday. And it was recovered entirely. Quickly. And well beyond its origin. Also, rather than stop pessimistically short of prior highs like yesterday, today's recovery has extended several points above yesterday's highs. It's still a little too shallow to view from a contrarian perspective. But excessive optimism isn't the only risk, and RSIs are not getting overbought anymore.

This is a late bias-up environment triggered above 2140.50, and it has already produced fresh highs at 2142.25. Reversing down prematurely wouldn't be unusual, only unlikely. But there's room down to 2139.00 before suggesting momentum is reversing down.

Well, we made it through the Black Monday anniversary from 1987, without any hint of a crash, or any jokes about it. In fact, the session behaved as if a session-long rally, each timing window probing the prior timing window's high, with only one exception. And that was the last window, perhaps inhibited either by pre-post-close earnings jitters (AXP, EBAY) or the evening's "Presidential" debate. "Unfinished business above" was left outstanding at the afternoon's 2145.50 bias-up target. Testing it Wednesday would have been vulnerable to extending higher. Delaying its test until Thursday now makes it likely to extend higher. The next higher objective would be 2150.00. WedEX didn't exactly trigger. Fluctuating throughout the afternoon around prior highs (i.e. 2138.00-2139.75) persisted through the close. Gapping up Thursday could serve by proxy, if gapping up enough and maintained. Gapping down would have to be relatively substantial to be predictive. I suspect the resolution will be up, based on the continued pessimism or restrained optimism, either one being somewhat bullish from a contrarian perspective. REMINDER: THE CHARTROOM LINK BELOW IS NEW, BUT THAT SHOULDN'T AFFECT YOUR LOGIN. PLEASE CONTACT ME IMMEDIATELY IF YOU EXPERIENCE ANY DIFFICULTY. Details and other markets coverage are discussed in the post-market Wrap recording here.

Monitor overnight Globex trading in the chaRTroom here.

THU morning signal (triggered at 10:15 ET) SPX ES Bias-up: above  2147.50 2141.50 ...would target  2152.25  2146.25 Bias-down: under  2139.00  2133.00 ...would target 2133.75  2127.75 Signal status: NO-BIAS, TESTED BIAS-DOWN 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.