Stock Market Trade Signals - 04-02-2015

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...
Ugh. Completely recovering from Tuesday night''s probe of fresh lows was predicted after the close. The 26-point drop to 2033.50 was several magnitude greater than the drop to 2054.50 I had anticipated, but still recovered. Perhaps it was the recovery''s size that inhibited it from turning positive at Wednesday''s open, let alone from trending back above Tuesday''s high. Wednesday''s open delivered another shock to the system by dropping 19 points. It ended quickly and was largely retraced, but the balance of the session ranged choppily sideways between 2045.00-2054.50, even by a last-minute surge to its upper-end.

Overnight action''s new info...
Wednesday''s last-minute surge to 2054.50 initially firmed a couple of points more. But that was reversed to begin trending back down to test the 2045.00 lower-end to Wednesday''s mid-day range. Current action is firming after having been ranging narrowly around 2045.00.

If, then...
Trending through the open beyond yesterday''s 2045.00-2054.50 range may be the only path out of its consolidation this morning. Those happen also to be this morning''s bias signals. The overnight dip can reflect caution, i.e. pessimism, which is potentially bullish from a contrarian perspective. That pessimism is ineffectual only so long as it holds the range''s lower-end, or recovers from probing under it to avoid triggering bias-down at 10:15. But the rally potential this morning probably requires triggering bias-up. Yellen speaks in a few minutes, after 24 hours of several other Fed speakers signaling their favoring a rate hike. More so than her actual comments, it is the eventual reaction to her comments -- whether only trending up or down, or reversing from a blip-up or blip-down -- can dictate whether the market has yet discounted or dismissed a rate hike.

First Trade...
Exiting the open at 9:45 above 2050.50 would be unlikely to trigger the 2045.00 bias-down signal at 10:15. Exiting the open under 2042.00 would be likely to trigger bias-down. Exiting the open above 2057.50 would be likely also to trigger bias-up.

Yesterday''s sellers are done.

Expectations during the pre-market Tour were for any trending likely to begin early, and to be aggressive. If that trending were going to be up, then it was likely to be up a lot. Up so much, that the bias-up signal would likely be renewed by also exceeding its bias-up target at 10:15.

The open did contain a 5-1/2 point surge from 2048.75 to 2054.25. That was just a warm-up for the 10-point surge launched by its consolidation up to 2063.00. And that was probed by almost 2 more points to attack 2065.00.

Essentially, this is the recovery back above Tuesday''s lows that Wednesday couldn''t do.

Overbought 1-minute and 3-minute RSIs at the high require its retest. The renewed bias-up target is 2068.75-2070.50. My 2058.50 pullback objective is being tested now. Back above 2061.25 would start to signal the rally has resumed.

A deeper pullback to test 2057.50 is possible. Volume should start to disappear this afternoon ahead of the three-day weekend. So, dipping any deeper too much later could end today''s rally instead.

THU afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2070.75
2063.00
...would target 2076.25
2068.50
Bias-down: under 2061.50
2053.75
...would target 2055.75
2048.00
Signal status: NO-BIAS, TESTED BIAS-DOWN 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.

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, UUP))
Wednesday''s bounce that attacked 1.0855 still had room to test 1.0900 just as a correction. Thursday took advantage of that room, now presumably ending its correction before resuming the decline to its 1.0700 target.

Gold Jun Contract (GC, ETF: (GLD))
Thursday morning''s dip wasn''t recovered entirely, so Wednesday''s breakout close wasn''t confirmed. That''s not bearish, but this early stage of the rally won''t tolerate much further delay in resuming.

Silver May Contract (SI, ETF: (SLV))
Filling the prior week''s gap Wednesday without closing above it had left the pattern vulnerable to a reaction down, which it did since Thursday''s open didn''t immediately extend higher. Another lower close would undermine the last pullback''s recovery.

30-year Treasury Jun Contract (US, ETF: (TLT))
Wednesday''s probe above 164-30/165-08 was tested as support Thursday, and then probed down to 164-16. Closing under 164-30/165-08 would start to signal the probe above prior highs was forming a Double Top likely to resolve down well under its interim low.

Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday''s narrow ranging around 48.75 was still being tested at the close, not high enough to confirm Wednesday''s breakout. Probing lower in reaction the Iran deal was recovered back above 49.25, suggesting the breakout would be extended. But the recovery attempt won''t tolerate much more delay in resuming.

Natural Gas May Contract (NG, ETF: (UNG, UNL))
Thursday''s EIA report wasn''t being greeted from a position of strength, since Wednesday was a new low close. But as I described during Wednesday''s post-market Wrap, the new low close wasn''t necessarily a position of weakness, since it fulfilled the delayed requirement of a recent breakout. That did allow a favorable reaction to EIA Thursday morning, surging back above prior lows to 2.72, leaving no unfinished business below.

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, UUP))
Wednesday''s bounce that attacked 1.0855 still had room to test 1.0900 just as a correction. Thursday took advantage of that room, now presumably ending its correction before resuming the decline to its 1.0700 target.

Gold Jun Contract (GC, ETF: (GLD))
Thursday morning''s dip wasn''t recovered entirely, so Wednesday''s breakout close wasn''t confirmed. That''s not bearish, but this early stage of the rally won''t tolerate much further delay in resuming.

Silver May Contract (SI, ETF: (SLV))
Filling the prior week''s gap Wednesday without closing above it had left the pattern vulnerable to a reaction down, which it did since Thursday''s open didn''t immediately extend higher. Another lower close would undermine the last pullback''s recovery.

30-year Treasury Jun Contract (US, ETF: (TLT))
Wednesday''s probe above 164-30/165-08 was tested as support Thursday, and then probed down to 164-16. Closing under 164-30/165-08 would start to signal the probe above prior highs was forming a Double Top likely to resolve down well under its interim low.

Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday''s narrow ranging around 48.75 was still being tested at the close, not high enough to confirm Wednesday''s breakout. Probing lower in reaction the Iran deal was recovered back above 49.25, suggesting the breakout would be extended. But the recovery attempt won''t tolerate much more delay in resuming.

Natural Gas May Contract (NG, ETF: (UNG, UNL))
Thursday''s EIA report wasn''t being greeted from a position of strength, since Wednesday was a new low close. But as I described during Wednesday''s post-market Wrap, the new low close wasn''t necessarily a position of weakness, since it fulfilled the delayed requirement of a recent breakout. That did allow a favorable reaction to EIA Thursday morning, surging back above prior lows to 2.72, leaving no unfinished business below.

NOTE: FRIDAY''S DROP HAS RENDERED THESE LEVELS MOOT... PLEASE CHECK THE BLOG FOR THE NEWER POST.
MON morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2071.50
2064.00
...would target 2078.00
2070.50
Bias-down: under 2062.00
2054.50
...would target 2055.50
2048.00
Signal status: LATE BIAS-UP, TESTED BOTH BIAS-DOWN 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.