Stock Market Trading Signals - 03-17-2016

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

CHARTROOM LINK (pre-open Market Tour begins at 8:55 ET)

PLEASE NOTE: I've been trying to resolve bandwidth issues that began overnight, so please accept my apologies if chaRTroom and recordings are not clear. Thank you. Through the prior close... Wednesday's FOMC statement was greeted soon after a noon hour sell signal's sell signal under 2006.00 had met its 2001.50 target. The satisfied selling pressure cleared the path to a bullish reaction that tested targets at 2018.25 and 2022.25. A last-minute sell signal triggered under 2019.00 and its 2016.00 target was met at the close. WedEX triggered an active bullish signal. The session was a breakout, being the first fresh high close above a multi-session range. However, buyers did not gain traction for their efforts. Overnight action's new info... Fresh highs were soon probed up to 2026.00. A pullback to 2019.00 was recovered to 2026.75 into Europe's opens. Consolidating there eventually resolved down. And down. Way down, testing 2006.00 as support. Its reaction is currently testing 2012.00. The overnight high is a "new Globex trend extreme." If, then... Gapping up is the only credible path to immediately resuming the rally. That seems unlikely, given the overnight slide's recent momentum. The requirement to retest the overnight high's "new Globex trend extreme" might help attract price higher intraday, but not necessarily at the open. Leaving the upside attraction outstanding would help WedEX produce its bullish bias Friday afternoon. If not for the new Globex trend extreme, gapping down under 2006.00 would have suggested yesterday's high was an anomaly. Gapping down under 2006.00 would still be more vulnerable to extending down this morning. But invalidating or even inverting yesterday's bullish signals will require rejecting all of yesterday afternoon's rally, back through its 2000.00-2001.50 origin. First Trade... Exiting the open at 9:45 under 2006.00 would be likely to trigger the 2008.00 bias-down signal at 10:15. Exiting the open under 1999.50 would be likely also to exceed the 2001.50 bias-down target and renew the bias-down signal. Exiting the open above 2012.00 would be unlikely to trigger bias-down.

No upside rush or downside attraction, allowing time to fluctuate. The pre-open bounce from 2006.00 had attacked 2018.00, but needed to extend a little further before retracing 61.8{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} of the overnight slide. Then the bounce was able to peak, and to be retraced, halfway back down to touch 2012.00. Neither bias signal was touched, so there's no requirement for an offsetting test of the other bias signal, or to test a bias target. But there's room to fluctuate between the bias signals. Bouncing back above 2016.75 (being tested now) could extend to test this morning's 2023.00 bias-up signal. Back under 2014.25 would target 2011.00 and potentially also the 2008.00 bias-down signal.

THU afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  2038.25 2028.50 ...would target  2042.00  2032.50 Bias-down: under  2027.50  2018.00 ...would target 2022.50  2012.75 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.

No-bias trending to new highs. This morning's 2023.00 bias-up signal held its test into the bias environment lapsing. Probing higher during the noon hour up to to 2031.00 tested the overnight high's "new Globex trend extreme" and this afternoon's 2028.50 bias-up signal. Dipping into the bbias environment's exit avoided triggering bias up. Dipping also held a sell signal under 2027.00. And despite not triggering, the 2028.50bias-up signal is being probed. Up to 2033.50, probing this afternoon's bias-up signal by 1 point. Being a no-bias environment, this is "no-bias trending" that is doomed to failure. Retesting the 2028.50 bias-up signal as support is required, if not also down to the 2027.00 level being tested when the bias signal triggered at 1:20. Meanwhile, yesterday's buyers didn't gain traction for their efforts, which also undermines resuming the rally so quickly. Extending higher is possible. But a bullish WedEX bias would be difficult without first correcting today's excess.

Thursday's rally contradicted the lack of traction gained by Wednesday's buyers. It doesn't change whether they gained traction -- the overnight slide was appropriate.  But fresh highs produced before the last hour would normally fail. That's not unfinished business below -- it is a reflection of underlying strength. Thursday's second consecutive higher close following Wednesday's breakout from a multi-session range is also a reflection of strength. The confirmation now requires an eventual third higher close. Not necessarily on Friday, but a new trend high close on Friday would entrench the uptrend by creating a new requirement for another eventual new high close. The bullish WedEX stands ready to assist, so long as the morning isn't too weak to climb all the way out of. Unfinished business below at 2027.00-2028.50 must still neutralize Thursday afternoon's "no-bias trending." Unfinished business above at the 2036.75 high's overbought RSIs must be neutralized, too. Stopping pessimistically short of the latter late Thursday suggests it will be exceeded more substantially, presumably after neutralizing the former. Details and other markets coverage are discussed in the post-market Wrap recording here.

Monitor overnight Globex trading in the chaRTroom here.

FRI morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2044.00 2034.50 ...would target 2049.00 2039.75 Bias-down: under 2036.25 2027.00 ...would target 2021.00 2020.50 Signal status: BIAS-UP, BIAS-UP 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.