Stock Market Trade Signals from Viditrade - 02-20-2015

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...
Thursday''s third consecutive lower open around 2089.50-2091.50 held its bias-down signal to put into play an offsetting test of the morning''s bias-up signal, which was fulfilled by rallying 12 points into noon. The noon hour''s drop ended the wide range, but the balance of the session was still choppy. The same relevant 2094.25-2095.50 area essentially defined the third consecutive session''s close.

Overnight action''s new info...
Drifting back down to 2092.50 bottomed into Europe''s opens. Firming to 2096.75 was soon explained by an anti-Grexit headline (Greece accepts most of the terms) whose reaction surged to 2098.50. It was corrected by pro-Grexit news (ECB preparing for Grexit) that retraced the surge and much of the firming down to 2094.00. Another pro-Grexit headline that soon followed (German-led bloc willing to accept Grexit) didn''t produce a fresh low. Only a much later delayed-deal headline triggered a break back to the 2092.50 overnight low, and than several ticks lower.

If, then...
Thursday''s lower open was a reaction to a pre-open surge, whose catalyst was  an anti-Grexit headline. Its reaction''s catalyst was the requisite pro-Grexit headline. History repeats. Most opportunities are produced by the pattern repeating, and other opportunities arise when the pattern doesn''t repeat. Did the latter just happen? Reaction to the last headline (Germany: "Grexit, meh") was relatively subdued and contained for awhile. The current fresh low''s catalyst spoke to a deal''s timing, and was neither pro nor anti-Grexit. If that''s at all predictive, then expiration''s opening bias can be up. Regardless, don''t forget there is no WedEX bias, only one item of "unfinished business above," and a fast-approaching weekend of illiquidity. The template of probing fresh highs can branch more easily into rejecting fresh highs if fresh highs are probed early.

First Trade...
Exiting the open at 9:45 above 2098.00 would be likely also to test the 2099.75 bias-up signal. Exiting the open above 2101.50 would be likely also trigger the bias-up signal at 10:15. Exiting the open under 2089.00 would make the 2090.75 bias-down signal likelier to trigger.

Lower open, on steroids, i.e. expiration.

The pre-open headline battles deposited the open at this morning''s 2090.75 bias-down signal. Its immediate reaction up to 2093.25 was reversed as quickly into a dive that touched the 2084.25 bias-down target.

Despite probing lower down to 2082.25, the bias-down target was recovered through 10:15. The bias-down signal was not renewed.

This is still a bias-down environment. At least, until it starts lapsing at 11:30, or until coming within 10-15 minutes of it starting to lapse. Bounces are possible, but less likely to gain traction. A retest of the low or its attack is likelier, potentially to be probed down to 2080.00.

Currently, a bounce just retested the open''s 2093.25 high while ranging around the 2090.75 bias-down signal. Extending the narrow range for another 20-25 minutes and then rallying could reverse to new highs. Rallying before then would be capable of extending, but not confidently.

By the same token, expending energy just to hover around the 2090.75 bias-down signal, only to start dipping again at 11:30, could trend down much deeper into the afternoon.

FRI afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2099.00
2095.50
...would target 2104.50
2101.50
Bias-down: under 2090.00
2087.00
...would target 2084.00
2080.75
Signal status: BIAS-UP 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))
Despite Thursday failing to exploit Wednesday''s close around 1.1400 resistance, and instead drifting down into the afternoon, early strength Friday still would have been credible for extending higher. Grexit headlines instead triggered a deep gap down to 1.1280... Die by the headline, live by the headline -- Later headlines were more encouraging for an accord, triggering the Euro''s complete intraday recovery up to 1.1435. Probing above Monday''s highs would still be credible for launching a new upleg.

Gold Apr Contract (GC, ETF: (GLD))
A little renewed strength Thursday night held the 1216.00 bounce limit was largely retraced into Friday''s open, but a required third lower close remains outstanding, along with the 1191.50 target area''s test. Post-close probing of fresh lows suggest its test will come soon, and possibly encompass the room for noise below it down to 1185.00.

Silver Mar Contract (SI, ETF: (SLV))
Narrow sideways ranging Friday isn''t very predictive. At least a temporary fresh low is likely, but there is no requirement for it to recover before extending to lower targets.

30-year Treasury Mar Contract (US, ETF: (TLT))
With no unfinished business below outstanding, a corrective bounce has been free to develop. Firming Friday a half-point above 144-30 was knocked back down to 144-18 support -- still not exploiting the bounce opportunity, but also not triggering a new downleg.

Crude Oil Apr Contract (CL, ETF: (USO, UWTI))
The multi-week Ascending Triangle has yet to break higher, despite having reacted up sharply from Thursday morning''s test of its uptrending support at 49.90.

Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
The outstanding third higher close was produced Friday, after gapping up and remaining entering the weekend above prior highs. Because of the multi-session range preceding it, that is a breakout. A second consecutive higher close Monday would confirm, and create another third higher close requirement. Pullbacks must meanwhile hold lowerprior highs at 2.83 as support.

If Greece can be persuaded not to leave the Euro... then the rally must have pretty good friends in pretty high places. No, seriously.

Pattern points... (Setups and technicals)
Breakout! Friday''s close was the first one above a multi-session range. If confirmed by a second consecutive higher close on Monday, then at least an eventual third higher close would be required. Being a new trend high close on a Friday, a higher close is still required, but only eventually.

The latter setup may be more relevant after Friday''s 25-point high-to-low rally. And not just because it seems to have fully discounted the day''s anti-Grexit developments. But Friday breakouts aren''t often confirmed on Monday. And characteristics of the week''s multi-session range already suggested its next upleg would be temporary.

Friday''s rally did create room for some initial selling that doesn''t damage the upward momentum. But that''s the open. Probing higher highs at any point intraday wouldn''t prevent an afternoon sell-off that puts the rally on defense.

What''s Next... (Outlook and opportunities)
We''ll talk about different possible opens at the weekend''s Saturday Review. We''ll also review any stock chart requests. Click here as much as 30 minutes before the 9:30am ET start time.

MON morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2112.00
2109.50
...would target 2116.75
2114.25
Bias-down: under 2105.75
2103.25
...would target 2100.00
2097.50
Signal status: BIAS-DOWN 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.