Stock Market Trading Signals - 10-26-2015

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

CHARTROOM LINK(s) o Win XP-Friendly entry o non-xp friendly (ilinc) (pre-open Market Tour begins at 8:55 ET)

Through the prior close... Already firming after Thursday's session-long rally, surging in reaction to China's rate cuts created a peak at 2074.75. Reacting back down to 2056.75 bottomed when the morning's bias environment began lapsing. That was still above Thursday's highs. Rallying into the final hour attacked the pre-open high up to 2073.50.. Overnight action's new info... Friday last hour had softened into and out of the close to 2066.00. The deterioration resumed at Sunday night's open, drifting down to 2061.00. A dip down to 2057.50 has reacted back up to 2064.00. If, then... Friday confirmed Thursday's breakout. At least an eventual third higher close is required. Reversing down immediately -- as overnight action suggests is the intent -- would be considered only a temporary correction. None of which may prove relevant today, since overnight weakness so far has been contained within Friday's range as only noise. First Trade... Exiting the open at 9:45 above 2069.00 would be unlikely to trigger the 2063.50 bias-down signal at 10:15. Exiting the open under 2059.75 would be likely to trigger bias-down. Exiting the open under 2055.50 would be unlikely to recover the 2058.50 bias-down target by 10:15, which would renew the bias-down signal.

Support holds, but not enough to reject a signal. Sunday night's action was contained within Friday's non-trending range, warning that this morning would not be optimal or predictive. The preliminary 2059.75 level did hold a test, but not until after 9:45, so the 2063.50 bias-down signal wasn't any more or less likely to trigger at 10:15. Still overlapping the bias-down signal at 10:30 didn't suffice as invalidating it. The next opportunity to invalidate the bias-down signal is at 11:30, exiting the bias environment back above the 2072.25 pre-10:15 high. Already, a bounce is attacking 2066.00. If not extended above 2072.25 by 11:30, the 2058.50 bias-down target would become "unfinished business below." Regardless, continue to be careful in this morning's environment.

MON afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2074.75  2068.00 ...would target  2079.50  2073.00 Bias-down: under  2066.75 2060.25 ...would target  2061.75  2055.00 Signal status: NO-BIAS 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.

A daily summary of high-profile members of several complexes... View a more detailed discussion of each chart at the end of today's Market Wrap. Eurodollar Sep Contract (EC, ETF: (FXE, UUP)) Gapping up slightly and firming Monday was contained within the 1.1100 bounce limit which keeps alive the downward momentum, and the confirmed break that is now seeking at least a third lower close. Gold Dec Contract (GC, ETF: (GLD)) Gapping up slightly Monday was just enough to range narrowly around the 1165.50 pullback limit that had held until Friday morning. Closing above 1170.00 would now target 1180.00, and then fresh highs. Silver Dec Contract (SI, ETF: (SLV)) Closing around 15.85 Friday had suggested that sellers didn't gain any traction. Gapping up slightly Monday didn't extend higher, but its tempered optimism keeps alive potential for resuming the rally. 30-year Treasury Dec Contract (US, ETF: (TLT)) Gapping up Monday above Friday's range didn't invalidate its break, and left outstanding the gap back to Friday's close which can attract price down to resume the decline. Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short)) Overnight weakness kept the pattern under pressure as lower targets remain outstanding, but a confirmed breakout close is still lacking. Natural Gas Nov Contract (NG, ETF: (UNG, UNL)) Trending down Sunday night from Friday's 2.27 close extended down Sunday night and intraday Monday to 2.05. Closing above 2'08 would suggest the decline was bottoming. But no recovery is signaled until also recovering above 2.16.

Monday was a second consecutive non-trending session. But it didn't start by gapping up like Friday, and it didn't gap down, so we know that buying pressure isn't expended. Anyway, higher objectives remain outstanding -- from a third higher close, to the rally's 2088.00 objective. None of which prevents probing lower Tuesday, whether by trending or by gapping down. In fact, Monday morning left outstanding "unfinished business below" at its  2058.50 bias-down target. But it was an inside day, as was the overnight action, so gapping open in either direction Tuesday would be likely to extend. Details and other markets coverage are discussed in the post-market Wrap recording here: https://roddavid10.mitel-nhwc.com/join/bwhfjfh

This evening, monitor overnight Globex trading in the chaRTroom at: non-xp ilinc

TUE morning signal (triggered at 10:15 ET) SPX ES Bias-up: above  2074.50 2068.00 ...would target  2080.50  2074.00 Bias-down: under  2065.00  2058.50 ...would target 2060.00  2053.50 Signal status: LATE BIAS-DOWN 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.