Realtime Day Trading Trends and Signals - 08-26-2016

FRI morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2179.00 2177.00 ...would target  2184.00  2182.00 Bias-down: under  2169.00  2167.00 ...would target  2163.75 2161.75 Signal status: BIAS-UP, BIAS-UP TARGET MET 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.

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... Thursday's open gapped down to test Wednesday's 2168.75 low, and snapped back up to avoid triggering bias-down. Its offsetting test of the 2178.75 bias-up signal became "unfinished business above," with 2177.00 resistance defining the session's high. In fact, while 2177.00 was likely to be an obstacle to the rally, its reaction retested the open's low down to 2167.50. The cash session bounced back up to 2172.00, and futures closed at 2174.25. Overnight action's new info... Thursday's late bounce firmed slightly to touch 2175.00. Choppy ranging into Europe's opens held 2172.75.as support while piercing slightly higher to 2176.25. Another dip has returned back down to 2172.75. If, then... Following yesterday's two near-death experiences of probing Wednesday's low, the overnight quiet may seem reassuring. Rather, its narrow range is like a thug waiting around the corner up ahead, on a deceptively quiet street. That corner is the cash session open, which is where it will either jump out at the market to attempt another break lower, or else shrink away to allow another bounce into the weekend... Not extending down Thursday doesn't mean the decline has lost any traction or momentum. Closing under 2177.00 kept those elements alive. That should prevent another corrective bounce -- if the decline is going to extend eventually, then there isn't any reason to further delay it today. But whichever direction the morning takes, don't forget that Friday mornings can be exacerbated by the two days of illiquidity bearing down. First Trade... [Click here to view the Bias parameters] Exiting the open at 9:45 under 2174.25 would be unlikely to trigger the 2177.00 bias-up signal at 10:15. Exiting the open under 2166.00 would be likely to trigger the 2166.00 bias-down signal.

Pre-Yellen optimism vs. post-Yellen optimism. The relatively narrow overnight range had tried breaking lower pre-open. Its pre-open recovery became a post-open surge, from 2174.25 up to 2180.75. Rather than patiently hunkering down ahead of Yellen's remarks, the market decided to greet them with a stiff upper-lip. Clearly, the open had become a battle between optimism and pessimism. And Yellen's remarks clobbered optimism right in its stiff upper-lip. Already ahead of her comments and triggering a sell signal under 2178.00, price plunged in reaction down to the setup's 2170.75 target. Excessive optimism, meet excessive pessimism. Even more impressive was its immediate reaction back up to a fresh high at 2181.50. Another reaction down held the 2177.00 bias-up signal as support, gravitated around a 2178.75 sell signal (which had been unfinished business from yesterday, and surged again to attack 2187.00. That's the renewed bias-up target. It's not officially in-play, since the 2182.00 bias-up target was still being overlapped at 10:15. But exceeding 2187.00 through 10:30 would suggest a bigger squeeze into the noon hour. Meanwhile, back under 2180.50-2181.25 would open the door to fresh session lows, if not also for the week.

FRI afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  2177.00 2175.00 ...would target  2182.50  2180.50 Bias-down: under  2170.00 2168.00 ...would target 2164.00  2162.00 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.

REMINDER: I WILL LIKELY BE AWAY FROM THE SCREENS LATER THIS AFTERNOON. So, excessive optimism got another clobbering on its stiff upper-lip. The next higher objective at 2187.00 was attacked to within 1 tick, by errant ticks, while RSIs became overbought simultaneously -- in reaction to news. That can undermine the requirement to be retested, but it's moot at the moment. Another set of headlines triggered a reaction down to and through the morning's 2170.25 low to 2160.75. Oversold RSIs during the noon hour can undermine its retest requirement, too. After drifting up to attack 2168.00, another dip only attacked this afternoon's 2162.00 bias-down signal.

Tenuous conditions triggered this morning's rally, and that had kept us vigilant for the potential of collapsing to new lows. The specifics may have changed, but the conditions remain tenuous. Recovering back above yesterday's ~2168.00 lows wouldn't necessarily reflect accumulation, but still drift back up into the close.

There's otherwise no bullish reason to revisit the noon hour's low. Neutralizing Its oversold RSIs would only risk focusing new sellers on the Friday Factors' illiquidity.

Friday ended with bounce, sizable by most standards, but somewhat tame compared to the intraday action preceding it. The three-week old gap back down to 2160.00 had been filled down to 2157.50, but no new sponsorship was able to extend that into a new downleg. Its reaction up attacked its 2170.75 target to within 2 ticks. And where was the close? At 2168.00. Not above to indicate that sellers had lost traction, and not under it to put into play lower objectives. AT 2168.00. Closing under 2177.00 has indicated the massive topping pattern is probably rolling over. Closing under 2168.00 would have indicated it is extending down. And under 2156.50 would tell us that extension is targeting a test of 2141.50. At a minimum. Gapping up Monday above 2188.00 would give the pattern another opportunity to probe fresh highs first. Details and other markets coverage are discussed in the post-market Wrap recording here.

MON morning signal (triggered at 10:15 ET) SPX ES Bias-up: above  2179.75 2177.75 ...would target  2185.00  2183.00 Bias-down: under  2165.50  2163.50 ...would target 2160.25 2158.25 Signal status: NOn-BIAS, TESTED BIAS-UP 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.