Stock Market Trade Signals from Viditrade - 01-21-2016

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

CHARTROOM LINK <<==click here (pre-open Market Tour begins at 8:55 ET)

Through the prior close... Wednesday's record-challenging gap down and extension to new lows had lost sponsorship at the 1804.25 noon hour low. The window had isolated a retest of the 1815.00 October 2014 "V" bottom. The balance of the afternoon rallied sharply to probe Friday and Tuesday's "higher prior lows" up to 1869.25. The last half-hour settled back down to 1849.00, but the rally had already gained traction for its effort. Overnight action's new info... The recovery immediately resumed and eventually extended to a fresh high at 1876.00, filling the gap back to Tuesday's close. It was retraced entirely by midnight, on the way down to 1836.25 ahead of Europe's opens. Choppy ranging since then has been narrowing around 1846.00. If, then... Durable bottom? No. Trading bottom? Possibly. Invulnerable bottom? No. DeMark is calling yesterday's selling intensity on par with the starts of 5-8{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} corrective bounces. Fair enough, but I would add 2-1/2 points: First, that it's not a straight-line there, and second, Wednesday afternoon's bounce already covered 2/3rds of the 5{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} objective. A corollary to those points is that correcting so much so quickly -- during the same session as the alleged low -- actually undermines the low instead of reinforcing it. In fact, half of yesterday's recovery is already retraced overnight. Don't forget that my active templates suggested that a capitulation was likely to span multiple sessions, which is not yet the case. Rising enough early enough would allow extending the bounce to reward the recovery for traction its gained. But fresh lows pre-open won't have much time to recover before that traction finds itself inverting, and new lows are in-play. First Trade... Exiting the open at 9:45 under 1843.25 would be likely to trigger the 1846.00 bias-down signal at 10:15. Exiting the open under 1833.00 would be unlikely to recover the 1840.00 bias-down target in time to avoid renewing the bias-down signal, next targeting 1829.25. Exiting the open above 1853.25 would be unlikely to trigger bias-down.

Is yesterday's high finally being probed? Not gapping down steeply kept alive the likelihood for rewarding yesterday's rally by probing yesterday's highs this morning. That's difficult to believe when the pre-open surge to 1874.00 is reversing down to 1841.00 into and out of the close. Just a little hiccup. Testing the 1846.00 bias-down signal held through 10:15 to avoid triggering. That would put into play an offsetting test of the 1865.00 bias-up signal. But the bias-up signal was being tested at 10:15 to invoke the grace period. And it was overlapped at 10:30 to trigger noN-bias. Its 1869.25 bias-up target was met anyway. And it has been probed up to 1873.75. The reward due yesterday afternoon's sponsorship (i.e. control of this morning's bias environment) suggests that probing above yesterday's highs will persist a little longer.

THU afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  1884.50 1877.25 ...would target  1890.50  1883.50 Bias-down: under  1870.00 1863.00 ...would target 1864.25  1857.00 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.

Not attracting buyers. The noon hour began hopefully, trending up from 1863.00 to fresh session highs. Attacking the afternoon's 1883.50 bias-up target to within 1 tick was quickly reversed to range widely around the afternoon's 1877.25 bias-up signal. Bias-up did not trigger. So, the no-bias environment was likely to be contained between its bias signals. In fact, the balance of the bias environment drifted down to its 1863.00 bias-down signal. Fresh lows extended already to attack 1852.00.  At least 1-minute RSI diverged positively there, and its reaction is attacking 1864.00. Extending above 1867.50 would be credible for revisiting at least today's high. Back under 1858.00 would simply resume the decline.

Trending back down Thursday afternoon was avoided, but the next likelier scenario was not to trend at all. So, the alternative was not to rally, but to range sideways into the close. This was the result of having bounced back up to yesterday's late 1869.00 high while the bias environment was lapsing. Combining that with no traction being gained, left the market hovering nervously with two days of illiquidity fast-approaches. Details and other markets coverage are discussed in the post-market Wrap recording here.

Monitor overnight Globex trading in the chaRTroom here.

FRI morning signal (triggered at 10:15 ET) SPX ES Bias-up: above  1875.75 1868.75 ...would target  1882.00  1875.00 Bias-down: under  1860.50  1853.50 ...would target 1853.75  1846.75 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.