Stock Market Trade Signals - 07-13-2016

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... Tuesday's session was essentially identical to Monday. Both gapped up to new highs, recovered a post-open dip back up to new highs through the morning, and triggered no-bias through the afternoon. Each also dipped before the close, although Tuesday's 5-point dip from 2149.00 was shallower and less pessimistic than Monday's 7-point dip, and stopped short of its 2141.00-2143.00 target area. Meanwhile, the minimum requirement of Friday's confirmed breakout was fulfilled, for at least a third higher close. And intraday sponsorship once again failed to gain traction for their effort . Overnight action's new info... Tuesday's late slide extended to touch 2142.00 before midnight. Narrow ranging ended with Europe's opens, first jumping to 2147.00, and then attacking 2149.00. If, then... Closing slightly above the rally's next higher 2143.00 objective nevertheless put into play even higher objectives, so long as 2143.00 maintains its recovery today. That will be difficult without gapping up above yesterday's highs, since the rally otherwise won't likely extend this morning -- not after yesterday's sponsorship failed to gain traction. Yesterday's highs are being attacked, but not yet probed. It's not yet too late, and there are still a couple of pre-open catalysts. Not gapping up could still probe higher this morning, but then we would expect the rally to start topping here. First Trade... [Click here to view the Bias parameters] Exiting the open at 9:45 above 2143.00 would be unlikely to trigger the 2141.00 bias-down signal at 10:15. Exiting the open above 2150.50 would be likely to trigger the 2149.25 bias-up signal.

Late surge's gap up crumbles through the open. Yesterday's 2149.25 high was touched so near the open that its sponsorship was a little suspicious. A surge up to 2152.25 probed it, but in a singular non-complex leg. Still, the pattern of gaps up marginalizing sellers got a benefit of the doubt. But that pattern was never exploited post-open. The 2150.75 opening print quickly slid back into negative territory at 2143.50. Bias-up failed so no-bias triggered, putting into play an offsetting test of the 2141.00 bias-down signal. Choppy ranging since then has touched 2148.00. Back under 2145.25 would signal the 2141.00 bias-down signal's test is underway. That would be invalidated by exiting the bias environment above the open's 2151.75 high before printing a fresh post-10:15 low.

WED afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  2154.00 2147.25 ...would target  2159.25  2152.75 Bias-down: under  2146.25  2139.75 ...would target  2141.00  2134.25 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.

Is today's dip only a healthy correction?. Rejecting the test of this morning's 2149.25 bias-up signal through 10:15 had put into play anoffsetting test of the 2141.00 bias-down signal. 2141.00 was tested down to 2139.50. Only 1-minute RSI diverged positively, but 3-minute RSI was making a higher oversold low after leaving oversold territory. Its reaction spiked up to 2141.00.

Price has only eked higher since then. The path down had been interrupted by ranging between 2143.50-2148.00. Now that range has been tested as resistance.

Back above 2144.00 and 2145.50 would be so far removed from the morning's low that its downward momentum could be marginalized. That wouldn't in itself require a recovery, no earlier than late-afternoon since no traction was gained yesterday. Triggering the 2147.25 bias-up signal is possible, but not necessary to produce another new highs -- for which fresh session lows may be the only deterrent.

Wednesday's overnight probe above Tuesday's high to 2152.25 came too late to be sponsored by strong hands. The open's shallow gap up to 2150.75 confirmed as much, as did its immediate reversal back down into negative territory. That created the requirement to test 2141.00, which the morning probed down to 2139.50. But that's as far as sellers got. And they could have gotten away with much more. If that were due to patience, then the close would not have been unchanged and back above the prior afternoon's low. Sellers didn't exploit the opportunity to trend down, which suggests they are weak hands. Gapping down Thursday under Tuesday and Wednesday's ~2138.00 lows would signal stronger handed sellers had arrived, at least for the morning. Similarly, immediately resuming the rally Thursday morning would require gapping up above Wednesday's 2149.00 highs -- being an easier task doesn't make it any likelier to be exploited, either. Two observations of the bigger picture: First is that Wednesday was a second consecutive higher close above 2143.00. An interim dip would be likely to recover to fresh highs targeting 2158.00 and potentially also 2168.00. Second is a bearish bullish WedEX signal triggered. So, from whatever level at the time, Friday afternoon and Monday morning will likely be biased down. Details and other markets coverage are discussed in the post-market Wrap recording here.

Monitor overnight Globex trading in the chaRTroom here.

THU morning signal (triggered at 10:15 ET) SPX ES Bias-up: above  2156.25 2149.50 ...would target  2161.50  2154.75 Bias-down: under  2147.00 2140.25 ...would target 2140.50  2133.75 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.