Stock Market Trade Signals from Viditrade - 02-02-2015

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...
Friday''s session was a wide-ranging inside day, spent exclusively in negative territory after gapping down. But it was more interesting in two ways. First was the late-morning reversal up from having trended down post-open, saved by a trial balloon that would seem to relieve Grexit fears. A second highlight was the afternoon bias environment''s exit, which had just rallied back to unchanged (filling the open''s gap), only to plunge 31 points to a fresh session low.

Overnight action''s new info...
Initial firming to 1993.00 was reversed to a fresh low at 1984.00, but that was soon recovered to 1995.00.More sideways ranging since then has included a touch of 1998.00, which is not delaying a reaction back down into the range at 1994.00.

If, then...
France''s support for Greece was leaked yesterday, but so far nothing more concrete has emerged regarding the real stumbling block, which is German. Friday morning''s trial balloon has drawn focus to Grexit. Without a solidly sourced statement sooner rather than later, selling could resume. At least, I would assume as much, since the pattern suggests fresh will be probed today unless opening strength can avoid being too shallow. Probing fresh lows could still be recovered intraday, but probably not after today.

First Trade...
[NOTE THIS MORNING''S REVISED BIAS-UP PARAMETERS]
Exiting the open at 9:45 above 1998.75 would be likely at least to test the 2002.25 bias-up signal. Exiting the open above 2004.50 would be likely also to trigger bias-up at 10:15. Exiting the open under 1994.50 would be unlikely to trigger bias-up, and increasingly likely to at least test the 1983.25 bias-down signal.

Different bat channel, but same bat time...

The 1998.00 overnight high was attacked into the open. But it was no likelier to gain traction and extend. At least, not without holding up through the open.

And the open didn''t hold up.

Quickly reacting down to test 1986.00 also tested Friday''s late low. Sawing through there soon extended down to 1973.25. That''s 15 points of selling pressure before the 10:15 bias timing window.

By then, a bounce had recovered the 1976.75 bias-down target to avoid renewing the bias-down signal. It''s still a bias-down environment, but not with any requirement to trend down further -- only the requirement to eventually retest the 1973.25 low whose RSIs are oversold.

Meanwhile, a bounce to 1985.50 may be preparing the low''s retest, which is triggered back under 1983.00 and 1980.75. The low could be retested down to 1971.50. Regardless, exiting the bias environment at 11:30 under its 1976.75 bias-down target would strongly suggest the drop is extending.

MON afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2013.00
2006.50
...would target 2018.25
2011.75
Bias-down: under 2001.00
1994.50
...would target 1995.75
1989.25
Signal status: BIAS-DOWN , BIAS-DOWN TARGET MET 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))
Several days of dull, shallow drifting lower were retraced Monday, which is to say that price firmed to attack 1.1370. Any higher Tuesday would be credible for surging to 1.1585. Otherwise, Monday''s firming was a last gasp before retesting lows under 1.1190.

Gold Apr Contract (GC, ETF: (GLD))
Monday''s gap down from testing 1277.50 was recovered entirely from 1266.50. There isn''t much room or time to delay reacting down again under 1272.00 to retest Thursday''s 1252.00 low and to resume Thursday''s break to complete the corrective dip.

Silver Mar Contract (SI, ETF: (SLV))
Friday''s 17.32 bounce high was retested Monday after gapping down, but the balance of the session essentially ranged narrowly sideways. A fresh low under 16.95 would be credible for resuming the decline.

30-year Treasury Mar Contract (US, ETF: (TLT))
The reaction down from Friday''s late test of the long-standing 151-28 target attacked 150-11 whose break would reverse the trend down. Otherwise, there remains potential for a fresh high testing 152-18.

Crude Oil Mar Contract (CL, ETF: (USO))
Friday''s late surge through 46.25 resistance to the longstanding 48.00 buy signal was extended higher overnight to test 50.00. Its retracement intraday was recovered. A second consecutive higher close Tuesday above 48.00 would confirm a bigger rally leg now underway.

Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Friday''s probe under Thursday''s lows ended the day still testing Thursday''s fresh low close, and not necessarily confirming the breakout. More fresh lows intraday Monday are also being recovered to overlap the two low closes, not necessarily extending the decline. Although unconfirmed, the decline gets a benefit of the doubt until disproved. But any initial strength Tuesday would be credible for extending higher intraday.

If ... then .

Pattern points... (Setups and technicals)
No sellers were trapped by Monday afternoon''s rally to fresh session highs. That''s not often the case. Sure, rallies can develop without trapping sellers, but Monday afternoon''s rally was pretty substantial -- 45 points off the morning''s low.

Nevertheless, Monday afternoon''s rally to 2018.50 began from the bias environment''s 1983.50 low. But the bias environment exit and final hour entry were still well under the noon hour''s 2000.00 high. That''s not a stable base for launching a durable rally. Perhaps if the rally had recovered a prior high, but it did not. (More on that in a moment.)

The 3:10-3:20 timing did trend up to fresh highs. That would have been bullish if either the bias environment exit or final hour entry had exceeded the noon hour''s high. Instead, the 3:10-3:20 window produced follow-through into the close, which has now lapsed.

So, what if the rally HAD recovered a prior high? Thursday-Friday''s ~2017.50 high was tested, but not exceeded. The next prior high that Tuesday''s open can recover to gain traction is essentially 2038.00+. That''s another 20 points higher, and probably needs news to achieve it -- news that attracts more buyers through the open instead of reversing back down.

What''s Next... (Outlook and opportunities)
Had Monday''s 3:10-3:20 window not trended up, or not extended higher through the close, then Tuesday''s open need only have recovered Thursday-Friday''s ~2017.50 high to extend Monday afternoon''s rally. Instead, all available buying pressure has been expended without gaining traction for the effort. And oversold RSIs at Monday''s 1973.25 low require a retest.

TUE morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2026.50
2020.00
...would target 2033.00
2026.50
Bias-down: under 2016.50
2010.00
...would target 2011.00
2004.50
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.