Realtime Day Trading Trends and Signals - 01-13-2015

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...
Tuesday''s opening 25-point slide to 2015.25 ended before the morning''s bias environment began. Its reaction up to 2029.25 ended before the morning''s bias environment ended. The balance of the session essentially drifted back down to attack the low. Oversold RSIs were left outstanding.

Overnight action''s new info...
Narrow ranging started giving way into Europe''s opens, but a blip-down to 2020.00 has extended its reaction up to attack 2036.00.

If, then...
This morning''s open might intend to ignore all of Monday''s pattern and simply rally back into Friday''s range. Monday''s sellers gained no traction, so gapping up is credible for reversing the trend. But it is not a fait accompli, and might only refuel sellers if post-open action fails to extend high enough or fails to hold a pullback to support -- levels that can be calculated from the opening print. In fact, the overnight rally might be fading already. Opening back under the overnight gains would already create momentum for quickly returning to yesterday''s lows.

First Trade...
Exiting the open at 9:45 above 2034.00 would be likely also to trigger the 2031.50 bias-up signal at 10:15. Exiting the open back under 2029.00 would be unlikely to trigger bias-up.

Overnight rally resumes, extends, explodes.

The pre-open dip to 2029.00 was recovered to fresh highs before the open. This morning''s 2037.00 bias-up target was essentially the open. Thirty minutes later, 2052.00 was essentially the high.

2052.00 was an important level on the way up. Its recovery through the close would be relevant, too.

Meanwhile, the near-term influence is down. There is room for noise down to 2044.00 or 2040.00 without reversing the trend down. There is also room down to this morning''s 2031.50 bias-up signal without reversing the trend down, but that would be suspicious.

Exiting the bias environment or entering the noon hour above 2049.25-2050.50 would make 2052.00''s recovery today very likely.

TUE afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2051.50
2044.75
...would target 2057.25
2050.50
Bias-down: under 2043.50
2036.75
...would target 2038.25
2031.50
Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET 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))
Gapping down Tuesday left outstanding an attraction above back at  Monday''s 1.1840 close. Being within 1.1770 prior lows and not lower, the gap down wouldn''t require being retested in case of immediate rally..

Gold Feb Contract (GC, ETF: (GLD))
Extending higher overnight to 1244.50 still avoided closing decisively in positive territory above 1233.00. There is room down to 1220.00 before actually signaling that momentum is reversing down.

Silver Mar Contract (SI, ETF: (SLV))
Tuesday''s overnight surge to and through 17.05  resistance would be rejected on a close back under 16.95.

30-year Treasury Mar Contract (US, ETF: (TLT))
The corrective bounce extended overnight to test above 149-00, but back under 148-23 triggered a dip another point lower. It was all recovered as stocks fell apart. A probe above 150-00 momentarily on Thursday''s 30-year auction can''t be discounted so long as 148-12 holds as support.

Crude Oil Feb Contract (CL, ETF: (USO))
Despite gapping down under Monday''s tests of the 45.90 target, narrow ranging there soon bounced and filled the gap back up to Monday''s close. Not closing under the 45.17 open does allow an immediate recovery back above 45.90 to start forming a bottom. The trend otherwise remains down.

Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Gapping up Tuesday from Monday''s new low could help to form a bottom.if Monday''s low is retested. But there is no requirement yet either way.

If one day''s price action can swing so widely... then another day''s price action can swing widely. It''s the "birds of a feather" rule. They tend to flock together. Friday''s approaching expiration is enhancing the volatility, and that influence isn''t likely to wane.

Pattern points... (Setups and technicals)
Tuesday morning''s rally put 2052.00 at risk of being recovered. Not holding  its test Thursday and Friday led to Monday morning''s drop. Not recovering its retest Tuesday led to the morning''s pullback -- and Tuesday afternoon''s drop fell through the two tests'' interim low. 

There''s no bearish reason to revisit 2052.00 again. Another retest at this stage would be likely to signal new highs in-play.

There was a bullish reason to revisit Monday''s 2015.25 low. So long as oversold RSIs there required a retest, a recovery attempt would be suspicious. Tuesday''s plunge retested 2015.25. Not by a little, and not briefly. Yet Tuesday''s close had recovered to overlap 2015.25.

The likelihood is for the decline to extend. Bouncing first isn''t likely, but bouncing first is likely to fail.

There is potential for a ''session-long decline" setup. Tuesday afternoon''s low printed during the bias environment, and closing action essentially trended up (it happened to hold a test of its 2022.00-2023.00 bounce limit). Gapping down Wednesday under Tuesday afternoon''s 2001.00 low would be likely to trend down through the close.

Somewhat similarly, a recovery could be signaled by immediately recovering 2029.00, if not also 2037.00. And that door is open only because Tuesday''s close was still overlapping Monday''s low. Oversold RSIs at Tuesday''s low make it unlikely.

What''s Next... (Outlook and opportunities)
My WedEX will trigger at Wednesday''s close. It forecasts possible bias into and out of expiration. I expect an active signal, not passive, which has a more aggressive resolution. We''ll discuss it during the afternoon as the signal begins forming.

WED morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2029.75
2023.00
...would target 2035.50
2029.00
Bias-down: under 2015.75
2009.25
...would target 2010.75
2004.00
Signal status: BIAS-DOWN, BIAS-DOWN 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.