Stock Market Trading Signals - 01-08-2015

THU morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2030.25
2023.25
...would target 2035.75
2029.00
Bias-down: under 2021.00
2014.25
...would target 2016.00
2009.00
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.

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...
Wednesday morning''s buyers that had absorbed the morning''s probes under 2011.50 were rewarded immediately at the bias environment exit. But its 17-point surge to 2022.00 resistance defined the upper-end of the afternoon''s three consecutive timing windows, which ranged sideways into the close

Overnight action''s new info...
Firming back to 2022.00 was given a boost by dovish overnight Fed comments. A 17-point surge to 2038.50 was retraced 8 points at its low. Recently another surge has probed fresh highs up to 2041.00.

If, then...
By avoiding the rally''s next target at 2029.00 yesterday, there became a high degree of likelihood that its test would easily give way to the next higher targets. The latest surge has come within 3 points of the first at 2044.00, and the next is 2052.00. Regardless, the overnight rally creates the same caveat as at yesterday''s quick test of its bias-up target -- neutralizing the upside attraction would be vulnerable to a post-open pullback, even if only temporarily.

First Trade...
Bias-up parameters are already exceeded considerably. Exiting the open at 9:45 above 2036.75 would help to keep the rally''s next higher target in-play at 2044.00. Back under 2031.50 through the open would be unlikely to also exceed the 2029.00 bias-up target at 10:15.

Next higher target already met. Again.

2044.00 was likely to be met this morning because yesterday''s rally held at 2022.00 resistance. Potential to the 2029.00 target became a likelihood for trending through it to its next higher target.

But 2044.00 was met already during the first half-hour. 

The setup seemed suspiciously similar to yesterday. Its target was met early, after trending up through the open -- an open that had gapped up after rallying overnight.

Similar setups that appear sequentially tend not to resolve similarly. Since yesterday''s similar setup reversed down through the morning, this morning''s setup should not.

So, if the 2044.00 target wasn''t going to be the morning''s high, then the next higher target at 2052.00 is in-play.

In fact, the open''s rally barely skipped a beat while extending another 5 points higher to 2049.00. This is relevant resistance, and it might cause the rally to hesitate. A corrective dip isn''t necessary, but it would have room to 2041.00 without damaging the uptrend.

Meanwhile, a fresh high above 2049.75 would start to signal the rally resuming to at least test its 2052.00 target.

THU afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2061.75
2055.50
...would target 2068.00
2061.75
Bias-down: under 2051.25
2045.00
...would target 2046.25
2040.00
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.

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))
Thursday''s gap down didn''t extend any lower intraday, and held a test of Wednesday''s lows as resistance. There is no signal currently.

Gold Feb Contract (GC, ETF: (GLD))
Overnight lows around 1204.00 weren''t retested intraday, but neither did the rally resume. A pullback targeting either 1195.00 or 1185.00 remains in-play before resuming the rally.

Silver Mar Contract (SI, ETF: (SLV))
Thursday''s 16.66 high didn''t extend higher, with near-term potential down to 16.20, if not also to retest prior lows.

30-year Treasury Mar Contract (US, ETF: (TLT))
The room for noise down to 147-10 failed to hold Thursday as potential to 146-12 was attacked to within 10 ticks. A knee-jerk reaction to Friday''s pre-open Employment Situation report could retest the high up to 150-00 (+/- 3 ticks) and still resolve down.

Crude Oil Feb Contract (CL, ETF: (USO))
More sideways narrow ranging Thursday hovered just above the decline''s 47.45 target, not yet exploiting that it has already held a test. Much further delay would begin to suggest at least the room for noise down to 45.90 will be tested.

Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Thursday''s inside day consolidated at least a nickel under the 2.98 buy signal that would start to reverse the trend back up.

If the rally from Tuesday''s lows is a temporary correction... then it couldn''t have traded any higher intraday or closed any higher than it did. Not unless the rally is on its way to new highs. Which it will likely be, if the week were to end above Thursday''s high.

Pattern points... (Setups and technicals)
The corrective bounce could have ended at 2022.00, or 2029.00. Testing 2044.00 so quickly Thursday morning left only 2052.00 -- and the room for noise above it at 2055.50 and 2058.25. Both met, both held.

At least, 2055.50 was still being overlapped. Closing under 2052.00 would have been more convincing that upside momentum was waning. Having extended to this degree for this duration without yet reacting down, extending any higher at Friday''s open would help to confirm new highs. The alternative open should be down considerably.

Opening significantly higher or lower shouldn''t be difficult. The pre-open Employment Situation report is a reliable catalyst.  Regardless, just not closing lower Friday would further suggest the ultimate resolution is new highs.

What''s Next... (Outlook and opportunities)
There are no preliminary levels before an Employment Situation report. Exceeding either 2052.00 below or 2058.00 above overnight would be likely to extend in that direction ahead of the payrolls report.