Stock Market Trade Signals - 01-16-2015

FRI morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 1996.00
1989.75
...would target 2002.25
1995.50
Bias-down: under 1989.75
1983.00
...would target 1984.00
1977.25
Signal status: INVALIDATED LATE NO-BIAS 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.

Enter the Chartroom here (pre-open Market Tour begins at 8:55 ET)

Through the prior close...
Thursday''s bias environment exit was within the noon hour''s range, so entering the final hour higher or lower wasn''t going to give anybody was gaining traction for their efforts. In fact, a break above 1994.00 probed its minimum 1997.00 objective to attack its maximum 1998.75 potential. Any higher would have been bullish through the close. Having expended all but 2 ticks of available buying pressure without gaining traction for the effort, the balance of the session trended back down to the lows at 1984.75. Futures got volatile into their close, surging 8 points and then cutting that in half.

Overnight action''s new info...
Get down, and stay down, apparently... Thursday''s post-close swing helped to extend the late dive as the drop extended relentlessly and deeply down to 1970.25. It was all retraced into and out of Europe''s opens. But 1988.75 reacted back down to almost 1973.00. Another recovery to 1988.00 has reacted down to almost 1976.00. Having retraced new highs to back under prior lows, last night formed a "new Globex trend extreme" that will require intraday retest eventually.

If, then...
First, the bullish scenario: Opening above yesterday''s lows and above the overnight range would shift the paradigm into reversal mode. It''s a perfect storm of expiration trending, its last-minute twist on position jockeying, and the impending illiquidity of a three-day holiday weekend, a substantial rally would be underway. We''d still assume a bearish WedEX influences the afternoon -- although WedEX could invert to bullish by exiting the morning''s bias environment above Wednesday''s 2005.00-2008.00 close... Sadly, now, the bearish scenario: Overnight lows are an attraction, and not gapping up above a prior high would put them into play. Also, greeting a weekend with only gradually lower and lower new relative lows can discover a lot of bottom-fishers and knife catchers suddenly trying to fit through the exit.

First Trade...
Exiting the open at 9:45 above 1984.50 would be less likely to trigger the 1983.00 bias-down signal at 10:15. Exiting the open under 1974.75 would be likely also to extend under the 1977.25 bias-down target at 10:15 to renew the bias-down signal, having potential for extending down to 1958.00 and 1955.00. And then 18 or 30 points lower.

Expiration craziness upsets timing, but still sticks to its levels.

Almost oblivious to the overnight probes into negative territory, the open surged from its 1983.00 bias-down signal to test 1994.00. But gapping open from under yesterday''s lows and overnight highs was doomed to failure.

At least, for awhile.

Its reaction attacked 1981.00 while also testing the 1983.00 bias-down signal within 3 minutes of the bias timing window. That invoked the grace period through 10:30, which ultimately avoided triggering bias-down.

Also at 10:30? The 1989.75 bias-up signal was being recovered.

It''s too late to trigger bias-up. No-bias is invalidated. For the balance of this morning, bias levels may be relevant, but their tests aren''t predictive. And, yes, this is a very unusual situation. But it shall pass. Beginning at about 11:30.

At least, for awhile.

Meanwhile, the 1995.50 bias-up target was tested to within 1 tick. Exiting the bias environment through 11:30-noon back under its 1989.75 bias-up signal would undermine the recovery''s sponsorship. Otherwise, extending through 1996.25 would signal a bigger bounce underway. 

FRI afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2006.50
1999.75
...would target 2012.50
2005.75
Bias-down: under 1995.75
1989.00
...would target 1990.25
1983.50
Signal status: STILL TESTING BIAS-UP SIGNAL, TESTED BIAS-UP TARGET 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))
Retesting Thursday''s 1.1575 low down to 1.1525 didn''t contain intraday selling pressures, which extended deeply to 1.1467. But the afternoon recovered both 1.1525 and 1.1575. Extending above 1.1615 would trigger as steep of a recovery attempt targeting 1.1780.

Gold Feb Contract (GC, ETF: (GLD))
Extending higher Friday confirmed Thursday''s breakout that was produced by the SNB capping the Franc. At least one more eventual higher close is required. Meanwhile, 1287.70 is in-play.

Silver Mar Contract (SI, ETF: (SLV))
Friday''s breakout to 17.85 must be confirmed by a second consecutive higher close. But the nearest sell signal is under 17.20.

30-year Treasury Mar Contract (US, ETF: (TLT))
The lower target of 151-08 and 151-28 was met at Friday''s high, which reacted back down to 149-05. The same session containing a new trend high is incapable of triggering a sell signal, but falling under 148-23 would start reversing the trend down.

Crude Oil Feb Contract (CL, ETF: (USO))
Recovering back above 47.45 Friday only attacked 48.65 whose recovery would signal a new upleg underway.

Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Choppy sideways ranging Friday continued the process of backing-and-filling the recent upleg so another buy signal could form.

If the three-day weekend has any effect... then it is already discounted by price action through Wednesday''s close. The bearish WedEX has little excuse for letting Friday afternoon''s rally develop during it watch. It had measured a relevant degree of pessimism as of Wednesday''s close. But Friday did not behave bearishly.

Pattern points... (Setups and technicals)
That is, not unless a sudden, steep and substantial plunge were to compensate for its detour. And that''s still in the realm of possible resolutions for the passive bearish WedEX. Actually, it is the last remaining possibility. Setups to trend down at noon, to trend down at the 1:20 bias timing window, or simply to trend down before the close, all came and went.

In the process of ignoring its bearish bias, Friday afternoon did form a potentially bearish setup. That is the bias environment''s Symmetrical Triangle, a pattern that tends initially to break falsely in one direction before reversing more substantially in the opposite direction. Reversing is difficult on expiration day, so perhaps that stage is being delayed until Sunday night.

Meanwhile, the afternoon''s ranging actually began before the bias environment and lasted through it. Fresh highs weren''t probed until the last half hour, the least relevant timing window. Until then, Wednesday''s 2005.00 cash session closed had been serving as resistance.

WedEX missed its opportunities to invert and become bullish. So, either it failed, or else next week gets off to an ugly start.

What''s Next... (Outlook and opportunities)
There''s no Saturday Review this weekend, so the post-close Market Wrap looked at the bigger picture after discussing other markets. Please post any questions to the Activity Feed and I''ll get to them during the weekend. Enjoy!

TUE morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2023.25
2016.50
...would target 2029.25
2022.75
Bias-down: under 2014.00
2007.50
...would target 2007.75
2001.00
Signal status: LATE NO-BIAS, TESTED BIAS-DOWN SIGNAL, TESTED BOTH BIAS-UP PARAMETERS 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.