Stock Market Trade Signals - 02-22-2016

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 shallow gap down consolidated the overnight dip through the bias timing window down to 1898.50. Tests of both bias-down parameters held through 10:15, although the bias-down signal was recovered late at 10:30. Anyway, the morning firmed up to 1916.00, and the balance of the session ranged sideways. Overnight action's new info... Gapping down several points Sunday night attacked Friday afternoon's 1908.00 low. That was soon recovered on the way to higher and higher highs throughout the night. Most recently attacking 1938.75 has reacted down to 1932.50. If, then... The overnight rally does not directly fulfill the actively bullish WedEX, but it does help to confirm the market's upside vulnerability that was originally signaled Wednesday. However, having rallied aggressively per the signal's remaining influence, a post-open recovery from reacting down would fulfill the signal. As would extending the rally throughout the morning. Regardless, no compelling sell signal is likely until the bias environment comes within view of lapsing. First Trade... Exiting the open at 9:45 under 1929.25-1930.25 would be likely to extend back down to the 1923.00 bias-up signal as support. Exiting the open above 1932.00-1932.50 would maintain the upward momentum.

Actively bullish WedEX remains influential. Dipping into the open probed only momentarily under the 1933.00 area. It was just long enough to introduce a preliminary buy signal above 1934.25. And that was just in time to capture a surge from 1932.00. The surge also triggered the more reliable buy signal above 1936.75. That was on the way to 1940.50, which pierced January's high. An obligatory dip recovered to fresh highs at 1943.00. Room for a temporary pullback down to 1936.75-1938.25 has been touched, barely. The bullish WedEX's influence remains intact. The degree to which price has extended already, and its steep slope, only reinforces that continued influence -- despite the inclination being to suspect that it is tiring. Meanwhile, probing a fresh high is entirely consistent with the scenario described during this weekend's Saturday Review. Although the shallowest of probes was enough to fulfill its retest, there is potential to 1952.00-1953.00 The bullish WedEX suggests at least a probe above 1943.00.

MON afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  1944.25 1941.00 ...would target  1949.00  1946.00 Bias-down: under  1937.50  1934.50 ...would target 1931.25  1928.00 Signal status: NO-BIAS, TESTED 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.

Monday's open gapped up considerably to 1932.00 and soon trended sharply higher to 1943.00. Still being governed by the bullish WedEX signal, a reaction down could not gain traction. And the reaction down to 1936.00 did not gain traction, instead recovering to a fresh session high at 1943.75. Now a reaction down can gain traction. Not just trending down, but gapping back down under lower prior highs like 1923.00-1927.00 to form an Island. Otherwise, just dipping into their test would be attracted back up to Monday's 1932.00 opening gap. Overbought RSIs at Monday's 1943.75 high require a retest, too. That can be neutralized overnight, although any complexity would require probing fresh highs intraday, whether only to 1946.00 or to 1952.00-1953.00. 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  1949.00 1946.00 ...would target  1953.00  1952.00 Bias-down: under  1936.00  1933.00 ...would target 1930.25  1927.25 Signal status: BIAS-DOWN, BIAS-DOWN 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.