Stock Market Trading Signals - 02-14-2017

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

NEW DAILY SCHEDULE First, watch the pre-open Tour recording HERE <<== Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A

Through the prior close... For a third consecutive session, Monday gapped up and extended higher into the afternoon, to a new trend high close. Retesting Friday's overbought RSI and bias-up target were neutralized along the way. A new (trend) high close neutralized a couple of requirements in the process. Room for noise beginning at 2327.00 was satisfied, and also held through the close. But another overbought RSI and bias-up target were left outstanding at 2329.00 and 2331.50, respectively. Overnight action's new info... Monday afternoon's 2327.75 pullback limit had been violated and a sell signal under 2525.75 was being tested into the close. Gradually drifting lower attacked the signal's 2322.75 objective to within 2 ticks ahead of Europe's opens. Narrow ranging from there has been resisted by 2325.75. If, then... Three consecutive sessions may be this leg's streak for gapping up, as none is currently indicated by overnight action. So, is trending higher intraday also ending its streak? Possibly, if not probably -- closing yesterday under 2327.00 after probing above it does suggest upside momentum is waning. But probing higher intraday remains possible, if not probable -- the overnight pullback still has some room below to 2321.50, while remaining in the orbit of yesterday's 2329.00 and 2331.50 "unfinished business above." Even a deeper pullback could test "lower prior highs" at 2313.00 and be attracted back up to Monday's 2319.00 opening print. Fed Chair Yellen's Senate testimony this morning will likely be inhibiting, and then probably a catalyst, to send price in both directions. Regardless of the vulnerability otherwise, we can't yet discount another new high close today. First Trade... [Click here to view the Bias parameters] Exiting the open at 9:45 above 2322.75 would be unlikely to trigger the 2321.50 bias-down signal at 10:15. Exiting the open under 23219.00 would be likely to trigger bias-down. Exiting the open under 2327.75 would be unlikely to trigger the 2330.75 bias-up signal.

Bias-down signal held its test when it mattered. Last night's narrow ranging had tried recovering before the open but only touched the much earlier 2327.25 overnight high. Trending down from there into and out of the open probed fresh lows at 2320.50. Ultimately, the 2321.50 bias-down signal held its test through 10:15, putting into play an offsetting test of the 2330.75 bias-up target. That's somewhat in question amid fresh lows after 10:30 down to 2319.75. Fresh lows that are now reacting back up to 2323.00.

Regardless, it's too late to trigger bias-down. It's too late to invalidate it, and too early -- the latter would be possible by exiting the bias environment under the 2320.50 pre-10:15 low, since there's been no fresh high since 10:15.

The no-bias signal only inhibits no-bias trending under the bias-down signal. It can't prevent probing it, especially amid Yellen's headlines, and their real-time, knee-jerk impact on other asset classes. That's "no-bias trending," which requires at least retesting 2321.50 when the bias environment is lapsing or later. Retesting, if not also reversing back up. Today, that's called unrequited selling. Holding above the pre-10:15 low would make this morning's 2330.75 upside objective become "unfinished business above." Also outstanding above are yesterday's 2329.00 high and 2331.50 bias-up target.

TUE afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  2329.75 2327.00 ...would target  2334.75  2332.25 Bias-down: under  2322.50  2320.00 ...would target  2317.25  2314.50 Signal status: BIAS-UP, BIAS-UP 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.

Targets being met faster than they're put into play. Two more probes under the 2321.50 bias-down signal during this morning's no-bias environment both recovered. The bias environment exit was above the pre-10:15 low, so an offsetting test of its 2330.75 bias-up signal became "unfinished business above."

That was as-of 11:30, when this morning's bias environment started lapsing. Now the afternoon's bias environment is triggering at 1:20, and this morning's 2330.75 objective is already being tested. So is the overbought RSIs from yesterday's 2329.00 high, and its 2331.50 bias-up target left outstanding.

Even faster, as this afternoon's 2327.00 bias-up signal is triggering, its 2332.25 bias-up target is already met. Too much, too fast? Well, not exceeding the bias-up target at 1:20 has failed to renew the bias-up signal.

It's still a bias-up environment, so the rally is free to extend. But often it doesn't, not when the target holds its test through 1:20. Overbought RSIs at the 2332.75 high do require a retest. Extending higher anyway could put into play 2343.00-2347.00. There's otherwise room back down to the 2327.00 bias-up signal during the bias-up environment. Breaking under it as the bias environment lapses could start sealing a top.

A blow-off is underway. It's not just four consecutive higher closes from the previous range. Or that three of those gapped up and all of them probed higher during the afternoon. Those elements reflect optimism, but not necessarily extended optimism or impatience. The blog-off indication came after Tuesday's close. It really began at the final hour's entry, when a pullback from 2335.25 had dipped 4 points, but no deeper. Retracing the entire dip into the cash session close then extended post-close to attack 2338.00. We haven't yet seen a post-close short-squeeze, until now. There's little to no chance that the trend extreme has printed. Or that reversing down into Wednesday's open would not soon recover. But opening under Tuesday afternoon's 2331.00 bias environment low would start to reject the rally above it. That would be especially bearish near-term if only fresh highs are probed overnight. Regardless, a pullback has room down to 2327.00 and 2324.50 while being only temporary backing-and-filling. Extending higher first would next target 2343.00-2344.00. Details and other markets coverage are discussed in the post-market Wrap recording here.

Monitor overnight Globex trading in the chaRTroom here.

WED morning signal (triggered at 10:15 ET) SPX ES Bias-up: above  2339.25 2336.50 ...would target  2344.75  2342.25 Bias-down: under  2329.50 2327.00 ...would target  2324.00  2321.25 Signal status: NO-BIAS 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.