Stock Market Trade Signals from Viditrade - 03-05-2015

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...
Despite having consolidated for several hours right up to the open, Tuesday night''s pullback suddenly resumed at Wednesday''s open. Potential to 2088.00 was probed by a couple of points before the 10:15 bias was signaled. The entire post-open drop was recovered to test its 2099.00 opening print by 3 ticks. The balance of the session ranged sideways back down to 2092.50.

Overnight action''s new info...
Flat-to-higher ranging inched its way back up to 2099.00 into Europe''s opens. A dip from there has been recovered to now probe above yesterday''s highs to 2100.50. BOE and ECB have kept monetary policies unchanged. Draghi''s press conference is a half-hour away.

If, then...
If yesterday''s break isn''t the week-old topping pattern''s breakout, then today''s open must reject it. It won''t be enough just to avoid resuming the decline -- which would only delay its resumption by a timing window, or two. Gapping up above yesterday''s 2099.00-2099.75 highs wouldn''t earn immediate confidence, either. Rejecting yesterday''s break would all but require gapping up to and/or through Tuesday''s 2105.00-2106.00 close. Draghi''s press conferences have a reliable track record for moving markets, although that movement seems to be narrowing. 

First Trade...
Exiting the open at 9:45 above 2104.25 would be likely also to trigger the 2101.75 bias-up signal at 10:15. Exiting the open under 2095.50 would be unlikely to trigger bias-up.

The 2100.00 opening print gapped up 4-1/2 points from yesterday''s close, and began sliding immediately. The gap back to yesterday''s close was filled at the 2096.00 low. 

Its reaction up was overlapping the 2101.75 bias-up signal at 10:15, which invoked the 15-minute grace period. But rather than resolve the test, 2101.75 was being overlapped at 10:30.

This is a noN-bias environment. It is not a bias-up environment, which would have put into play the bias-up target. It is not a no-bias environment, which would have put into play an offsetting test of the bias-down signal. It is a noN-bias environment, which is not influenced by any bias parameter.

Gapping up is the only credible start to retesting last week''s highs. But the gap up was too shallow to require reject yesterday''s break, which would actually require testing last week''s highs. But until a sell signal or distributive pattern were formed and triggered, I''m giving the upside a benefit of the doubt.

THU afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2103.25
2102.50
...would target 2109.75
2108.25
Bias-down: under 2098.75
2097.25
...would target 2093.75
2092.00
Signal status: BIAS-DOWN 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))
Wednesday''s close under the descending triangle''s 1.1125 target to also test its next lower support at 1.1075 was then retraced back up to attack 1.1125 at Thursday''s open. Then came Draghi, whose comments sparked a momentary pierce of 1.1000. Being a second consecutive lower close from a multi-session trading range, at least a third eventual lower close is now required.

Gold Apr Contract (GC, ETF: (GLD))
An early test of 1206.00 resistance was reversed down sharply Thursday morning to probe back under 1197.50, still targeting 1194.00 if not also 1188.00, so long as 1201.50 and 1204.00 aren''t recovered.

Silver May Contract (SI, ETF: (SLV))
Thursday morning''s rally was retraced entirely, but only probed slightly negative territory. The vulnerability remains lower.

30-year Treasury Jun Contract (US, ETF: (TLT))
Thursday''s opening dip to fresh lows reacted up quickly back into Wednesday''s range, but only to attack the 159-12 bounce limit before ranging narrowly around unchanged through the afternoon.... There is no unfinished business below outstanding ahead of Friday''s pre-open Employment Situation report, but that''s not a position of strength that would have been indicated above 159-24 and 160-00.

Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Firming overnight had extended Wednesday''s close above 51.25 to within a quarter of the 52.65 confirmation. The gap was quickly retraced but the balance of the session only fluctuated narrowly around unchanged. Back under 50.00 would start to signal  a new downleg underway.

Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Wednesday''s test of the 2.77 buy signal wasn''t decisive, requiring Thursday to confirm by closing above 2.84. A positive reaction to the EIA report tested it, similar to the prior day''s 2.77 test, neither rejecting it nor recovering it decisively.

If two days of buying pressure can''t prevent a fresh low... then who''s going to defend against a sell-off? Of course, it hasn''t been two entire days of buying pressure. But Wednesday''s downleg during its first 15 minutes was then retraced through the balance of the session. Thursday was spent almost entirely in positive territory. But neither effort gained traction. So, another downleg at Friday''s open would be difficult to absorb..

Pattern points... (Setups and technicals)
Gapping up Thursday was too shallow to be reliable for extending higher. Although it was rejected into negative territory, that proved only temporary. But spending the entire session in positive territory isn''t necessarily bullish, not when Wednesday''s 2099.00-2099.75 highs restrained every rally attempt.

The optimism is ineffectual. That''s not necessarily bearish. The next session''s early sell signal would be that much more credible. Rallying first would be that much likelier to reverse back down entirely. But each initial is as likely as the other.

Thursday''s session didn''t invalidate Wednesday''s break lower, and made it more difficult to be invalidated. What could have been achieved by gapping up a little Thursday must now be done by gapping up a lot. And there is upward traction that can be relied upon Friday to attract a recovery after initially trending down.

What''s Next... (Outlook and opportunities)
The monthly Employment Situation report is released pre-open Friday. And being a Friday, the morning''s bias signal is likely to persist through the noon hour. Being so near the highs, there is potential for a new high close, which would affect the topping pattern. The same Friday Factors could exacerbate an initially negative reaction down.

FRI morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2105.75
2104.25
...would target 2112.50
2111.00
Bias-down: under 2097.00
2095.50
...would target 2089.50
2088.00
Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET 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.