Realtime Day Trading Trends and Signals - 03-02-2016

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... Invalidating the traction gained by Monday's sellers required at least gapping up Tuesday to 1943.00, but then also extending higher from there. Tuesday's gap up to 1943.00 first reacted down to attack 1938.00. But the delay was compensated by quickly rallying back to Monday's 1956.00 high. That made Friday's 1968.75 pre-open high retest likely, and its 1971.00 target was met during the afternoon bias environment. Resuming the rally extended it up to 1975.50 at the cash session close. Overnight action's new info... Futures had extended already to 1978.50. Its extension up to 1984.50 was retraced into and out of Europe's opens, back to and through yesterday's cash session close. Now 1971.00 is being attacked as support. Meanwhile, there was enough complexity to the overnight extension to consider it a "new Globex trend extreme" that requires intraday retest. If, then... The 1971.00 target of retesting Friday's pre-open high has not yet broken higher. Its initial test yesterday afternoon reacted down, the subsequent higher high at 1975.50 reacted down to 1971.00, and its recovery made no higher high before the cash session close. Only futures have probed higher -- and despite probing substantially higher, 1971.00 has attracted price back down to it again. Since buyers didn't gain traction yesterday, extending the rally requires gapping up. A more subtle beginning to retesting the overnight highs would be vulnerable to reversing down hard this afternoon. First Trade... Exiting the open at 9:45 above 1979.25 would be likely to trigger the 1977.00 bias-up signal at 10:15. Exiting the open under 1971.00 would be unlikely to trigger bias-up.

Recovery attempts resisted by yesterday's close. Opening at the 1971.00 attraction firmed to within 3 ticks of yesterday's 1975.50 cash session close. Its reaction stretched the rubber band to attack 1968.00, and snapped back up to 1 point above yesterday's 1975.50 cash session close. The 1977.00 bias-up signal wasn't triggered, only attacked to within 2 ticks. The next reaction attacked the 1966.00 bias-down signal to within 1 tick. Being a no-bias environment, the bias signals should define either end of its range. Back above 1971.00 (being tested now) would suggest a retest of the range's upper-end, which could extend higher as the bias environment starts lapsing. Similarly, breaking lower immediately wouldn't be credible.

Still under pressure without sponsorship. PROGRAMMING NOTE: Some instability in the chaRTroom caused some attendees to lose connections. Please let me know if you were affected to help isolate the issue's cause... thank you. This morning's no-bias environment triggered without touching either bias signal. If touched later, either bias signal would be required to define that end of the range. Bouncing to within 2 ticks of the 1977.00 bias-up signal was reversed to within 1 tick of the 1966.00 bias-down signal. Recovering that to a fresh high consolidated around the 1977.00 bias-up signal up to 1978.75.

Now the no-bias environment has lapsed. The bias signals need not define the range. But there's still no requirement to trend beyond either end of the 1966.00-1977.00 range.

Back under 1973.75 (being tested now) would target a retest of this morning's lows, and back above 1977.00 could extend to retest overnight highs. Still, neither resolution is required, and trending again today could be difficult until after the afternoon bias environment.

WED afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  1982.75 1980.50 ...would target  1989.50  1987.50 Bias-down: under  1973.00  1971.00 ...would target 1968.25  1966.00 Signal status: NO-BIAS, TESTED BIAS-DOWN 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.

Buyers didn't gain traction for their effort Wednesday, since the final hour's entry and the 3:10-3:20 window didn't trend up. But they were rewarded anyway by later trending up to fresh post open highs at 1984.75. That neutralized the attraction to the overnight high's "new Globex trend extreme" 1 tick lower. It required being retested intraday, often the same day (although not necessarily).

Leaving the upside attraction outstanding could have preserved the rally's momentum in case Wednesday had pulled back. Neutralizing its attraction earlier in the day would have been vulnerable to reacting down durably. But waiting until the session's last minutes also meant closing above prior highs -- that enables recovering from an overnight dip since the gap back to Wednesday's close will want to be filled.

Other durable paths down are possible, but only post-open, and only after probing a fresh high. Otherwise, Thursday is vulnerable either to backing-and filling again (which is less likely because of it might duplicate the prior session's pattern), or to gapping up and extending to test the 1993.00 area. 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  1988.25 1986.00 ...would target  1994.00  1992.00 Bias-down: under  1977.50  1975.50 ...would target 1971.25  1969.00 Signal status: LATE 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.