Realtime Day Trading Trends and Signals - 01-25-2016

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

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Through the prior close... Gapping up 31 points Thursday to 1892.00 was essentially Friday's midpoint, as the balance of the session fluctuated relatively narrowly up to 1900.00 and back down to 1884.00, then back up again. Overnight action's new info... Friday's sideways ranging has resumed, albeit narrower. since Sunday night's blip-up momentarily tested 1904.00. That was reversed into a narrowing range back around 1900.00, which broke lower into and out of Europe's opens fell to 1887.50. Reacting back up is testing to 1900.00 as resistance has kept the range narrow, but not so much calm as paralyzed by anxiousness. If, then... Today's only econ report has no track record for influencing price action, but ECB head Draghi speaking today should have an impact. Not already gapping down under Friday's lows at Monday's open makes the rally likely to extend another 15-20 points higher. First Trade... Exiting the open at 9:45 above 1905.00 would be likely to trigger the 1902.00 bias-up signal at 10:15. Exiting the open under 1896.00 would be unlikely to trigger bias-up. Exiting the open under 1886.00 would be likely to trigger the 1892.00 bias-down signal.

Hovering just above Friday's lows. Gapping down under Friday's 1884.00 low was the minimum requirement to signal that the corrective rally had ended. Gapping down a little could have extended down post-open to suggest the same. But the open's gap down has not extended. Rallying immediately is not necessarily the alternative. Bias-down was triggered under 1982.00 at 10:15, putting into play a test of its 1885.75 bias-down target. Meeting it would still keep the door open to resuming the corrective rally. Back above 1894.00 would suggest the bias-down is invalid, targeting at least a retest of Friday's 1900.00-1902.00 highs. Meanwhile, fresh lows are likely, albeit only temporarily, before the corrective rally can resume.

MON afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  1901.00 1893.75 ...would target  1907.00  1900.00 Bias-down: under  1890.75  1883.75 ...would target 1885.75  1878.50 Signal status: LATE NO-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.

Morning's dip recovered, but not reversed. This morning's 1885.75 bias-down target was met easily this morning, but not until the first hour had lapsed. A knee-jerk reaction to the Dallas Fed survey got out of the way, and fresh lows were soon probed down to 1881.75. Recovering into and out of the noon hour up to 1895.50 failed to trigger the 1893.75 bias-up signal. Consolidating there formed a Head & Shoulders that is now breaking lower aggressively to 1887.50. Back above 1891.50 would signal the dip had been absorbed and reversed, probably to probe above the 1904.00 overnight high. Failing to hold 1986.25 as support would suggest a retest underway of this morning's lows.

The final hour's accelerated pace met 1869.00 as the 3:37-3:52 position-squaring window opened. Its support was still being tested as the window closed. Persistently oversold 3-minute RSI had left oversold territory, diverging positively on the 1868.00 low's retest. That's a long way down from exiting the noon hour at 1895.00, or testing 1904.00 Sunday night. But it's Wednesday's recovery high, which had extended higher Thursday and Friday. And so long as 1869.00 holds as support, the recovery can still resume to probe 10-15 points above Sunday night's high to 1915.00-1920.00. But Monday afternoon's decline gained traction, so avoiding fresh lows Tuesday morning requires gapping up -- a lot. Gapping up a little would still be likely to probe under Monday afternoon's lows, under 1869.00. But so long as 1856.00 doesn't break during lower, the corrective bounce could still be productive. Details and other markets coverage are discussed in the post-market Wrap recording here.

Monitor overnight Globex trading in the chaRTroom here.