Stock Market Trade Signals - 01-31-2017

Proper context can start the day with a solid win and make all the difference.

NEW DAILY SCHEDULE First, watch the pre-open Tour recording HERE <<== Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close... Monday's open gapped down 8 points to its 2281.00 bias-down target. The next 90 minutes plunged 18 points more down to 2263.25. Lower prior highs down to 2275.00 didn't contain the drop and launch the next upleg, which Thursday and Friday's shallower dips had tried, and failed. Or, did it? Rallying through the afternoon peaked upon touching its 2277.00 maximum upside target. It originated too late to be the product of strong hands, but its reaction down closed at 2275.00. Oversold RSIs were left outstanding at the low. Overnight action's new info... Having fulfilled buying pressure up to 2277.00 with weak-handed sponsorship, a reaction down became highly likely. Narrow ranging supported by 2275.00 ended with the BOJ's expected unchanged policy statement. Quickly breaking lower attacked 2268.00, which then supported a somewhat narrow range. This range broke higher, retracing all the way back up to 2275.00. Its reaction down to 2270.25 has been recovered almost entirely. If, then... Monday afternoon's bounce off its oversold lows had waited too long to extend for its sponsorship to be strong-handed. Isolating the doomed bounce's retracement to the overnight by opening back above 2275.00 could be sufficient to resume the rally Tuesday afternoon. Trying to trend up too aggressively already Tuesday morning might extend to higher prior lows at 2287.00-2289.00 before failing. Oversold RSIs at Monday's 2263.25 low require an eventual retest, which would be the likely attraction to not opening back above 2275.00. First Trade... [Click here to view the Bias parameters] Exiting the open at 9:45 above 2275.00 would be unlikely to trigger the 2271.50 bias-down signal at 10:15. Exiting the open under 2269.00 would be likely to trigger bias-down.

Opening dip attacks yesterday's low. Yesterday afternoon had been trying to trigger a sell signal under 2270.00 when a late rally began. Originating late, its sponsorship was weak-handed, dooming it to failure. Further undermining the recovery attempt, the late bounce fulfilled the maximum bounce target at 2277.00. And held it. And closed AT the critical 2275.00 instead of above it. One overnight plunge to 2268.00 was recovered entirely to 2275.00. The open could have isolated the probe under 2275.00 to the overnight. It didn't. The open was greeted at 2269.00-2272.00.

Yesterday afternoon's sell signal under 2270.00 would have targeted a retest of the morning's 2263.50 low, required by its oversold RSIs. That was attacked to within 3 ticks while probing under this morning's 2271.50 bias-down signal and its 2266.00 bias-down target.

The reaction up triggered a buy signal above 2266.75 that extended up to 2269.75. Having fulfilled the bias-down target, entering the noon hour back above the 2271.50 bias-down signal could launch a rally back to new highs. But stopping optimistically short of actually touching yesterday's low isn't likely to produce a durable recovery. Fresh lows would target 2259.75, which could hold as the low, or else break lower targeting a retest of 2248.50.

TUE afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2273.25 2268.75 ...would target  2278.25 2273.75 Bias-down: under  2265.00 2260.50 ...would target  2259.50 2255.00 Signal status: NO-BIAS 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.

Unfinished business below is neutralized. Stopping optimistically 3 ticks short from touching yesterday's 2263.50 low did not satisfy it. It was an actual print, and not just a calculable objective.

Reacting up to 2269.75 was retraced almost entirely, also stopping optimistically short of touching the 2264.00 low. The next bounce resolved down to a fresh low at 2262.25, satisfying the objective.

Reacting up again attacked the 2268.75 bias-up signal during the noon hour held. This is a no-bias environment. Probing a little higher would have been allowable, but instead another dip is attacking 2264.00. There's room down to the 2260.50 bias-down signal during the no-bias environment.

Trending gets more difficult as tomorrow's FOMC statement approaches. But another downleg would be allowable after the bias environment begins lapsing. Its break would have potential to test 2248.50.  Back above 2268.75 would target a retest of the 2276.75 overnight highs.

The bias environment was exited under the noon hour's 2268.50 high. But the final hour was entered at fresh afternoon highs to 2271.00. Extending higher through the 3:10-3:20 proxy window would have confirmed traction was gained. It didn't, but that didn't prevent extending higher to attack 2277.00 through the close. The cash session close equated to 2275.00. Again. Not recovered, not broken, by a weak-handed rally. Again. Vulnerable again to reacting down overnight, overcome if extended higher overnight. Again. Any near-term trending should be obvious before the open, before typical anxiousness ahead of the afternoon's FOMC statement. The nearby attraction below at Monday's oversold RSIs is met and held. "Higher prior lows" back to last Thursday and Friday's 2287.00-2291.00 could both attract and repel price. So, there's plenty of room for action on Wednesday. Details and other markets coverage are discussed in the post-market Wrap recording here.

Monitor overnight Globex trading in the chaRTroom here.

WED morning signal (triggered at 10:15 ET) SPX ES Bias-up: above  2283.00 2278.50 ...would target  2288.00  2283.50 Bias-down: under  2275.25  2270.75 ...would target  2269.75  2265.25 Signal status: LATE NO-BIAS, 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.