Stock Market Trading Signals - 09-11-2017

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

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... Friday's gap down and dip to 2457.00-2459.00 was all that remained from its pre-open dip to 2455.50. The collapse it had threatened was avoided for the open by trending up through 9:45. The morning's 2465.00 high failed to recover positive territory, keeping alive the collapse potential. But any remaining selling pressure was expressed by a dip attacking the 2457.00 opening low. Overnight action's new info... Hurricane Irma devolved faster than models had been predicting. Sunday night's open reflected the surprise and its relief, gapping up 6 points to 2467.00 and soon breaking higher to test the gap back up at the prior Friday's 2473.25 cash session close. That was relatively early in the night, but it is still being tested after having extended only to touch 2475.00. If, then... I asked at Friday's close whether the session's intraday pattern would resolve the following night, as did Thursday's. That pattern was bearish, failing to recover positive territory that might have rejected the overnight probe of fresh lows. Sunday night's gap up doesn't delete Friday's question, but adds another. First, post-open action can still trend down, despite gapping up this morning. The gap from the prior Friday's 2473.25 close is influential resistance regardless of being filled intraday, which gapping up would suggest is being tested by extreme optimism. The second question to now ask is whether not trending down will instead trend up relentlessly. Gapping up above Friday afternoon's highs is forming a sort of "session-long rally." Not an optimal setup, but still credible if the open were to trend up. First Trade... [Click here to view the Bias parameters] Exiting the open at 9:45 2474.00 would likely also exceed the 2472.25 bias-up target at 10:15 to renew the bias-up signal. Exiting the open above 2467.75 would be likely at least to trigger the 2465.75 bias-up signal at 10:15.

Gap and run creates anchor to absorb reversal attempt. Sunday night's open had leap-frogged over the 2465.75 bias-up signal. Its 2472.25 bias-up target was tested as support before the open. Gapping up to 2474.00 resumed the rally, extending relentlessly up to 2481.75. 1-minute RSI had diverged negatively along the way, but only while 3-minute RSI remained "persistently overbought." Twice. Each setup offered a buying opportunity. Not until 3-minute RSI left oversold territory did the 1-minute RSI's negative divergence at 2482.00 actually influence price action.

Immediately. Its reaction down was retraced 61.8{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} of the way back up to 2482.00. The next reaction down has pierced 2479.00.

Still, we're only looking for a temporary corrective dip. Trending up through the open created an anchor that will want to be retested in case of a pullback. The dip may be done already, although its likely objective is 2477.50, and potentially 2475.00. July's ~2484 high basis SPX has been attacked to within a quarter. But not touched. Another sweet spot? It doesn't require a retest, except for the foregoing reasons described above. We'll start to think otherwise if the afternoon bias-down signal is triggered.

MON afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  2487.25 2484.75 ...would target  2492.25  2490.00 Bias-down: under  2479.75  2477.50 ...would target 2474.75  2472.25 Signal status: BIAS-UP 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.

Shallow morning pullback recovers to resume the rally. The corrective dip from 2482.00 was shallower than it was brief. Its potential to 2477.50 was barely attacked to within 5 ticks. A narrow range there finally resolved up as the bias environment began lapsing. Extending higher through the noon hour touched 2487.00. This afternoon's 2484.75 bias-up signal triggered, putting into play its 2490.00 bias-up target. There has yet to be a fresh high.

Let's clarify what today's test of July's "pivotal high" means, and what it doesn't mean. As with any pivotal high test, the actual high is now all but assured to be tested, too. That's 2486.00 basis Dec and 2488.00 basis Sep, and both have been pierced by 3 ticks. It's also almost 2491.00 basis S&P Cash (SPX) which is still 1 point away.

I first addressed the pivotal high's attack on the last rally leg. Testing it and entrenching the uptrend then would have made the next upleg likely to probe significantly higher. Last Tuesday's drop created a new downleg. Its distribution has changed the reliability of a new high having substantial consequences. It's not ruled out, but it's not as likely.

Meanwhile,remember that today's upleg is NOT a session-long rally. Regardless of how it has behaved so far, or how it might still behave, its setup wasn't optimal. Afternoon stagnation or even reversal down is still possible.

Weekend weather wasn't a game-changer for the ongoing topping pattern. Monday's surprising relief rally did position the market to for a bigger leg up if reinforcements were to arrive Tuesday. Otherwise, either an immediate pullback is needed to refuel buyers. Extending higher too quickly would find buyers extended and buying pressure expended. Extending higher would also fulfill Monday afternoon's "unfinished business above" at its 2490.00 bias-up target. The final hour touched a sell signal at 2484.00 without triggering it. Monday morning was the first actual uptrending since the prior Tuesday afternoon's reaction up from the morning's plunge. 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  2491.50 2489.00 ...would target 2497.75  2495.50 Bias-down: under  2483.00 2480.75 ...would target 2476.75  2474.25 Signal status: 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.