Reliable Day Trading Signals from Viditrade - 02-04-2015

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 open gapped up to its bias-up 2026.50 target and extended higher from there to fulfill the highest renewed bias-up target attacking 2035.00. Choppy backing-and-filling was likely to be only temporary, but it lasted a little longer and fell a little deeper than usual for the pattern. Regardless, the eventual resolution did extend well above the open''s high to test 2044.00.

Overnight action''s new info...
Ranging back down to 2039.00 began extending lower ahead of Europe''s opens. A 10-point surge from barely touching 2033.00 was retraced as quickly to 2039.00, and now almost all the way back down to 2033.00 amid non-conciliatory Greece debt headlines.

If, then...
There is no "unfinished business above" in-play, and yesterday''s buyers didn''t gain traction for their efforts. But the rally''s momentum nevertheless remains intact -- with a path to probing above 2059.00-2062.50 intraday -- so long as the open does not retrace the last relative low at 2032.00. If not rejected and recovered immediately, that could reverse the trend down to retest Monday afternoon''s range under 2000.00.

First Trade...
Exiting the open at 9:45 under 2032.00 would be likely also to trigger the 2035.25 bias-down signal 30 minutes later at 10:15. Exiting the open above 2039.00 would be unlikely to trigger bias-down.

Getting a quick start, and paying the price.

The overnight drop extended back to yesterday''s 2032.00 last relative low until almost the last possible minute. The reaction up attacked 2043.00.

A couple of relevant points about that: 2032.00 was never touched post-open, so its test didn''t actually hold. That would have been more bullish.

The 2035.25 bias-down signal did recover through 10:15 from its test. Thsi puts into play an offsetting test of the 2046.25 bias-up signal.

The gap back to yesterday''s 2042.00 futures close was filled, and reacted down. It''s attraction is neutralized. The gap back to yesterday''s 2043.50 cash session close remains outstanding.

Expectations for the overnight drop to recover are intact. In fact, an interim dip back under 2035.25 didn''t extend deeper than its first 3 minutes. Proving it weak-handed, an 8-point reaction up is now retesting 2041.00.

Exiting the bias environment under 2033.25 would be bearish. But the recovery attempt otherwise remains intact.

WED afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2050.25
2044.25
...would target 2055.75
2049.75
Bias-down: under 2044.25
2038.25
...would target 2037.00
2031.00
Signal status: LATE NO-BIAS, TESTED BOTH BIAS SIGNALS 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))
Wednesday''s dip to 1.1400 can suffice as a pullback limit after Tuesday already confirmed Monday''s breakout. But any follow-on weakness Thursday morning should be recovered and reversed up into the close instead of gaining traction.

Gold Apr Contract (GC, ETF: (GLD))
Tuesday''s drop didn''t extend down Wednesday, which gapped up a little Wednesday but reversed back down from testing 1272.50 resistance. Fresh lows remain likely.

Silver Mar Contract (SI, ETF: (SLV))
Firming Wednesday after the recent lack of volatility doesn''t endorse the bounce as necessarily extending. The noise is still likely to resolve down.

30-year Treasury Mar Contract (US, ETF: (TLT))
Gapping down Wednesday and extending down to 148-18 tried confirming Tuesday''s break under the 149-14 sell signal. But its recovery back into positive territory above 149-14 undermines the drop, and leaves the door open to backing-and-filling up to 150-12 and 150-26.

Crude Oil Mar Contract (CL, ETF: (USO, UWTI))
Tuesday''s surge through 54.00 obviously got very much ahead of itself, as Wednesday''s reaction fell back to the 48.00 buy signal. It might even extend down to 47.35, which would be almost too deep to reverse the trend down. Back above 49.95 would resume the rally.

Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Wednesday''s dip avoided confirming Tuesday''s breakout, which prevents greeting Thursday''s EIA report from a position of strength. Bottoming potential remains intact, but not yet triggered.

THU morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2044.25
2038.25
...would target 2050.50
2044.50
Bias-down: under 2031.50
2025.50
...would target 2025.00
2019.00
Signal status: BIAS-UP, BIAS-UP 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.

If not for the late ECB news... then a reaction down into the close was still likely. Just not as deep. But the target had been met essentially, and its sponsorship satisfied..

Pattern points... (Setups and technicals)
Two consecutive opening surges met selling pressure that was nevertheless absorbed, and then reversed to fresh session highs. Tuesday''s open gapped up and ultimately absorbed the morning''s drop. Wednesday''s gap down bounced, but still had to absorb a fresh session low before extending higher.

It''s difficult taking sellers seriously with those resolutions. That doesn''t prevent dipping -- this was a major theme Tuesday morning, that its selling took price down, but it didn''t reverse the trend down. 

Of course, it''s difficult NOT taking Wednesday''s late sellers seriously. The reaction down from 2049.00 to 2038.00 and then to 2030.00. Twenty points in 10 minutes. That has extended another 7 points to 2023.00 post-close.

Is this reaction just exacerbated by the "fortune" of its timing? The afternoon rally''s sponsorship was fulfilled by testing the 2049.75 target  to within 2-3 ticks. Those buyers had no traction, anyway, since the bias environment exit and final hour''s entry were within the noon hour''s range. There was no other required upside. And after the news, it had become too late to attract countertrend sponsorship. 

What''s Next... (Outlook and opportunities)
Wednesday''s late reaction can extend down near-term -- and not just to test the 2023.00 post-close low. The rally from under 2000.00 Monday afternoon requires being retraced at some point. Its test would be vulnerable to extending down anyway. The more bullish scenario would be to already start retracing the drop before Thursday''s open, if not already opening above its origin.