Stock Market Trading Signals - 07-31-2017

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... Thursday's mid-day 2480.00-2457.00 plunge left the door open to Friday confirming a massive paradigm shift was underway. Or to ignoring it. Two patterns were trying to take control -- a trend change setup, and a lopsided Head & Shoulders. Neither bearish pattern was confirmed Friday, despite an 11-point overnight drop from Thursday's 2472.50 close. Friday's opening dip held the 2461.50 overnight low's retest and steadily recovered 8 points through the close. Bearish patterns not confirmed, but not invalidated, either. Overnight action's new info... Sunday night's open was immediately weak, and extended down to 2466.25. Ranging sideways formed an Ascending Triangle that greeted Europe's opens at its 2468.75 resistance. That triggered a quick 6-point surge to 2474.75. Consolidating since then has formed a Symmetrical Triangle resisted by this morning's 2473.50 bias-up signal. If, then... Friday's inside day wasn't a terrible consequence for Thursday's unsuccessful bearish behavior. Closing negative didn't invalidate the topping attempt. It can continue forming after another upleg that fully or partially retraces the high. Or, a gap down can compensate for Friday's delay. Upside potential to 2484.00 and 2490.00 remains intact, but gapping up sharply is needed to overcome another intraday pullback. Last night's surge to 2474.75 only fulfills a partial retracement of the high, and almost completes the Head & Shoulders top pattern's right side. Recovering further this morning would be threatened by reacting down post-open from the overnight high. First Trade... [Click here to view the Bias parameters] Exiting the open at 9:45 above 2475.00 would be likely to trigger the 2473.50 bias-up signal at 10:15. Exiting the open under 2469.00 would be unlikely to trigger bias-up. Phonetic dictation... good morning welcome it is Monday it's time for Monday's Morning Market to her we have okay interesting night interesting night and that we're here on the one minute started with a pole back-tracing Friday's recovery I'll go into that and just a moment for context and just kind of sat it out waiting for Europe's opens and there is Europe's opens and there is a surge that is it was just really need to watch unfold very quickly basically a 20 minutes already forming a little bit into the opens of course it wasn't an unknown I'm sure that Mark it was going to be doing well markets and they did and since then not rejected just consolidating seemingly waiting around for us opens regular intraday opens forming a symmetrical triangle interesting thing about a symmetrical triangle is it tends to break falsely in One Direction before reversing more substantially in the other okay interesting thing about overnight action is it influences intraday through the opening 15 minutes of volatility or not at all so put those two together and that's why we tend to see that if there's any overnight pattern greeting the intraday like this that if this triangle breaks out one way or the other and intends to reverse intends to prove that break out as a false break out it will be obvious during those opening 15 minutes so adorable for the opening 15 minutes of volatility if there's a breakouts a higher it'll need to be reversing all ready by 9:45 if that's going to be a false break out that reverses more substantially in the opposite direction like down to the 6558 offsetting test of the bias down signal otherwise and by the way ahead of or at or during the opening 15 minutes to volatility that isn't reversed by 9:45 we'll just extend in other words an instance where a possible resolution at set up that is bullish or bearish that goes the distance all the way up to that consequence and doesn't complete tends to behave in the exact opposite manner alright so that's basically the pattern in the oven if we if we break down that's going to be in the context of one of the two bears patterns that were dealt with last week there was One Barrage pattern last week that we had a break under the interim low that threaten to reverse the trend it wasn't going to happen doesn't happen on sessions that contain a friend extreme that there's also reversal but that could have come back Friday and compensated for the delay that's clearly not been here so we're not going to be concerned with that again that needed confirmation from shoulders which is okay and that would have been drop on Thursday pair of backing and filling that isn't quite backing and filling but a little more aggressive to the downside that could be trying to repeat Thursday's drop anyway which hasn't gotten a confirmed confirmation to a break out by the way Friday isn't going to good old that has suspected Thursday's retest Wednesdays 11 was not barish that still needs to recover 143 14/16 that's the real inflection point of the pattern coming up to test it again as it was being attacked just like it was being attacked for Thursday is open or overnight after Wednesday's close just waiting for that break higher well position for it it'll be very disappointing to the pattern if it doesn't trigger it crude oils reward for having really the potential reward for not reversing down from 47 25 or 40 from 4825 back under 4725 was 50 5010 1509 in 5006 has been tested overnight from above .

Gap up is retraced. Gapping up to the 2473.50 bias-up signal blipped-up to touch the 2475.00 pre-open high. That was done while hovering at the open, maintaining the gap up. Maintaining, but not extending. The opening 15 minutes of volatility lapsed, and so did support, as price collapsed to attack 2467.00. An offsetting test of the 2465.50 bias-down signal is in-play. It is being attacked now to within 3 ticks, so it won't become "unfinished business below" if left outstanding. Its test should define the morning window's lower-end. So, a bullish scenario would not only pierce or overlap it but also try probing under it. This impatient pessimism could be bullish from a contrarian perspective. We began tracking a Head & Shoulders after Thursday's close. The overnight / pre-open high held a test of the pattern's left shoulder. That doesn't require completing the pattern and launching a downleg, but it makes that bearish resolution more possible. There's still potential down to the left shoulder's 2362.75-2363.50 lows without yet confirming the downleg underway. And recovering 2470.25 would help to resume the rally.

MON afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2474.75 2471.75 ...would target  2479.50  2477.00 Bias-down: under  2468.75  2466.25 ...would target  2463.00  2460.00 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.

Holding up, but not extending. This morning's gap up at the 2473.75 bias-up signal wasn't extended. Its collapse triggered no-bias, putting into play an offsetting test of the 2465.50 bias-down signal. It was pierced by an errant tick at the morning's low. Rallying from there through the noon hour touched this afternoon's 2471.75 bias-up signal. It held, triggering another no-bias environment. Being the afternoon, an offsetting test of the 2366.25 bias-down signal is not required. But it would be the likely objective of a downdraft. Meanwhile, the bias-up signal should define the afternoon bias window's upper-end. Probing it later would be free to resume the overnight rally, and extend to new highs -- all but invalidating the Head & Shoulders pattern. Otherwise, dipping back to the morning's lows could break lower into the close. The Head & Shoulders pattern would be very much in-play, still awaiting more confirmation at lower levels.

The ongoing Head & Shoulders pattern could have resolved during the final hour. The entire session had attempted breaking either way. First Sunday night's surge held up into Monday's open. And then it collapsed when the open had lapsed. Overnight rally and opening drop, neither one extending. Two no-bias environments. The final hour could have broken in either direction. The final hour didn't break the afternoon's range. But it did expand it, in both directions. So, the pattern didn't resolve, but not for lack of trying. This range wants to break, and is that much more vulnerable to gapping open either way Tuesday. Details and other markets coverage are discussed in the post-market Wrap recording here.

Monitor overnight Globex trading in the chaRTroom here.

TUE morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2475.75 2473.00 ...would target  2480.75  2478.00 Bias-down: under  2467.75  2465.00 ...would target  2461.25  2458.50 Signal status: LATE BIAS-UP, TESTED BIAS-UP 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.