Stock Market Trading Signals - 09-12-2016

MON morning signal (triggered at 10:15 ET) SPX ES Bias-up: above  2133.00  2124.75 ...would target  2138.50 2130.00 Bias-down: under  2126.00 2117.50 ...would target 2119.00  2110.75 Signal status: NO-BIAS INVALIDATED, TESTED BOTH BIAS SIGNALS AND BIAS-DOWN TARGET 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.

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

Through the prior close... Friday's open gapped down 16 points to 2157.00, and doubled that into the noon hour's test of 2140.00. Often, such a Friday morning slide would produce a flat-to-higher afternoon. But the selling resumed more aggressively. The cash session close equated to 2120.50, but futures extended down to 2115.50 and 2113.25. August's 2134.00 prior low was broken on the way down to prices last seen two months earlier in July. Overnight action's new info... Sunday night's open blipped up momentarily from Friday's futures close to touch 2117.00, but that was still 3 points under Friday's cash session close. The drop soon extended down to 2109.00 to await Asia's opens, which triggered another drop to fresh lows at 2100.25. Bouncing 8 points was retraced entirely through Europe's opens. Overnight lows are still being attacked. If, then... Gapping down is currently indicated above June's "lower prior highs" (discussed during this weekend's Saturday Review). Barely. Its representative price can be reduced to 2095.00-2100.00. Gapping down under it is made a little likelier today because Friday's open gapped under its lower prior high. Regardless of the opening print, recovering through the open from having probed under it could help to launch a morning bounce.Not reacting to lower prior highs could enable today's drop to make Friday's drop seem relatively puny. As a reminder, just closing under 2134.00 would confirm a trend change, requiring at least an eventual third lower close. Lon-entries today should be considered only for brief exposure. First Trade... [Click here to view the Bias parameters] Exiting the open at 9:45 under 2109.00 would be likely to renew the bias-down signal by not recovering the 2110.75 bias-down target through 10:15. The renewed bias-down target would be 2102.00.

Counter-trend bounce. The overnight test and retest of 2100.25 had recovered up to 2114.00 pre-open. The opening print was essentially the 2110.75 bias-down target. And post-open action was only optimistic. The initial surge barely hesitated until filling the gap back to Friday's 2120.50 cash session close. Its reaction down to 2115.00 was recovered to test the 2124.75 bias-up signal. But bias-up was attacked only to within 1 tick instead of invoking the grace period. The 2124.75 bias-up signal was probed AFTER triggering no-bias. IMMEDIATELY afterward. Too late to trigger or to invoke the grace period. But maintaining its recovery through 10:30 invalidated the no-bias. So, probing the bias-up signal this morning isn't no-bias trending. 2129.50 was touched. Its 1-min RS diverged negatively and now 3-min RSI is leaving overbought territory. Back under 2123.25 would signal momentum reversing down. Extending higher would be unlikely to exceed 2134.00 through a relevant timing window -- but that doesn't preclude probing above it temporarily.

MON afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  2144.00 2136.00 ...would target  2149.25  2141.25 Bias-down: under  2135.75  2127.75 ...would target 2127.75 2119.75 Signal status: LATE NO-BIAS-UP SIGNAL, 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.

Corrective bounce limit being tested. Not connected to the intraday gyrations is a corrective bounce limit at 2134.00. It may be probed intraday, so long as any probe above it is isolated to a timing window. Interestingly, it was probed by a knee-jerk reaction's spike up to 2143.50 on dovish comments from a dovish Fed speaker.  That same spike fulfilled the 2141.25 bias-up target. Its reaction down overlapped the 2136.00 bias-up signal in time to invoke the grace period. triggered late no-bias triggered at 1:30.

Late no-bias after fulfilling the bias-up target already reacted down to 2130.75, suggesting that buying pressure is ending. That doesn't necessarily mean reversing down immediately -- the afternoon bias environment is not an optimal time for trending.

Overbought RSIs at the 2143.50 high don't require a retest for being a news reaction, but a retest has room for noise up to 2145.00 or 2147.00. And back above 2136.75 has signaled that retest underway.

Exiting the bias environment or entering the final hour back under 2134.00 would likely be followed by retracing much of today's rally. Potentially, all of it -- if not today, then probably overnight. Closing above 2134.00 would require gapping down tomorrow to confirm the trend has reversed down.

Monday's close above 2134.00 undermines the trend change setup. Most other elements of the intraday rally were were not bullish. The recovery stopped short of Friday's 2157.50 opening print, which is both a natural attraction and resistance. Last week's "higher prior lows" were tested, neutralizing their attraction above. Only the bias environment exit probed higher so no traction was gained for the effort, meaning that the day's buyers were fulfilled. The overnight low at 2100.25 was the least bit pessimistic to qualify as testing "lower prior highs" which is potentially bearish from a contrarian perspective. And the overnight low was complex enough to qualify as a "new Globex trend extreme" requiring intraday retest. The gap back to Thursday's 2173.00 close doesn't require being filled, but probably will be filled anyway if Tuesday's open were to maintain a gap up. Gapping down under Monday afternoon's 2130.50 low would form a "session-long decline" setup, but that's not the only path down. Signals are too mixed to be overwhelming in either direction. 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  2166.50 2158.50 ...would target  2173.25 2165.25 Bias-down: under  2153.50  2147.50 ...would target 2149.00  2141.00 Signal status: BIAS-DOWN, BIAS-DOWN 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.