Realtime Day Trading Trends and Signals - 03-21-2016

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... Friday's quadruple witch expiration barely gapped up to Thursday's highs, barely probed Thursday's highs, and barely held onto Thursday's highs. But Thursday's highs weren't rejected. That defined the balance of the session, which ranged choppily at or above Thursday's highs. The noon hour's reaction down from fresh highs was recovered during the afternoon's bullish WedEX, and the new trend high close on a Friday further entrenched the rally. But buyers gained no traction for the effort. Overnight action's new info... Sunday night's open was at the 2036.50-2037.50 low of Friday's post-close dip. Soon, sliding had extended under Friday's lows to withing 1 tick of this morning's 2030.75 bias-down signal's support. Bouncing into Europe's opens was retraced to retest the low, forming a bottom. A very influential bottom, which launched a steep two-hour rally that probed Friday's high up to 2044.25. That has reacted down to test the opening range as support 2037.25. If, then... Friday left us with a lot of moving parts. They all seem to be moving higher. At least, for Monday morning, with the bullish WedEX likely to influence price action aggressively. The overnight reversal from its initial weakness does suggest what to expect post-open, so long as the reversal isn't rejected. Similarly, already largely retracing the large recovery suggests that a post-open rally can fade into the noon hour, assuming that it does develop. While the new trend high close on Friday did entrench the rally for at least another new trend high close, it does not require that higher close to be produced today. First Trade... Exiting the open at 9:45 above 2043.00 would be likely to trigger the 2041.00 bias-up signal at 10:15. Exiting the open under 2039.00 would be unlikely to trigger bias-up. SPECIAL NOTE: Wednesday's bandwidth issue has returned -- in a BIG way. It was resolved before our Market Tour last week. I'm not confident about this morning (upload speed has ranged sporadically from a respectable 4.95 down to a horrific 0.10). We'll test it shortly before the Tour, and might switch to an alternative, which still wouldn't be optimal.

Only opening action briefly displays upward aggression. The overnight gyration was duplicated on a smaller scale by a post-open surge. The 2036.00 open had extended up to within 1 tick of this morning's 2041.50 bias-up signal. It hasn't been straight down from there, but it has been only down. A pullback to 2036.50 was anticipated, but it extended back to the 2033.50 pre-open low. And triggering no-bias after testing the bias-up signal has put into play an offsetting test of the bias-down signal -- which would be effectively a retest of the 2031.00 overnight lows. Is the bullish WedEX dead if a target is in-play below?A bounce from 2033.50 prevented extending deeper than the first 3 minutes under the sell signal. Back under 2034.50 would resume the decline. Otherwise, back above 2037.00 could try the bullish WedEX again.

MON afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  2051.00 2041.50 ...would target 2057.75  2048.50 Bias-down: under  2043.75 2034.50 ...would target 2036.50  2027.00 Signal status: NO-BIAS, INVALIDATED ABOVE 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.

Bullish WedEX repeats Friday afternoon's pattern. Friday afternoon had been entered in a slide from the morning's recovery. Like its morning's recovery, Friday retraced the entire slide into the cash session close. This morning's opening surge was productive, testing the 2041.50 bias-up signal. But its reaction down slid to 2032.50. Like Friday afternoon's slide, it was all recovered -- at least, to within 1 tick of the morning's high.

Bullish WedEX doesn't necessarily produce a rally, not when it's called on to absorb downdrafts. Having said that, absorbing a downdraft on Friday afternoon usually produces an aggressive rally on Monday morning.

What else about Friday will be duplicated today? Notice that its unremarkable range has only been pierced on either end, by another otherwise unremarkable range. Having failed this morning's attempts to break the range, the afternoon isn't required to do anything new. By that same token, trending this afternoon -- especially if begun after the bias environment begins lapsing -- could extend through the close.

Retesting the 2044.25 overnight high Monday afternoon created an "outside day." Haven't seen that in awhile. It's otherwise meaningless, except to make remarkable an otherwise unremarkable range. Actually, more could be said for Monday, which produced a new trend high close. That fulfills the minimum requirement established by Friday's new trend high close -- that there be an eventual higher close. Fulfilling it so quickly is a little useless, since it neutralized the setup's predictive value. Actually, the neutralized upside attraction now updates the reversal template with one less impediment. A reversal isn't required, and it can be overcome, but two consecutive days of unremarkable (mostly unremarkable) does suggest the rally's momentum may be lapsing. Actually, it may be only the recent expiration sponsorship that is lapsing. The rally can resume by gapping up Tuesday, since Monday afternoon's buyers gained no traction for their efforts. Or, an immediately break lower could find buyers at a lower level to sponsor the next rally leg. Multiple sessions of relatively narrow ranging tend not to resolve immediately. In other words, trending tends to follow a false break in the opposite direction. So, reversing down would more likely begin by failing an aggressive probe of fresh highs, first. Details and other markets coverage are discussed in the post-market Wrap recording here.

Monitor overnight Globex trading in the chaRTroom here.

TUE morning signal (triggered at 10:15 ET) SPX ES Bias-up: above  2054.75 2045.00 ...would target  2064.75  2055.25 Bias-down: under  2046.25  2035.75 ...would target 2038.25  2028.50 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.