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

DAILY SCHEDULE Watch the pre-open Tour recording HERE <<== chaRTroom is now open... Pre-open update is at 9:15 ET

Through the prior close... (summary of last Market Wrap) Monday's immediate 27-point collapse down to 3217.25 seemed bearish. It probed well under the lows of Friday's collapses, and under another consolidation that had formed during the recent rally. Retracing 61.8{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} of the collapse up to 3232.00 resolved back down to attack the morning's low, momentarily. But while all intraday behavior was bearish to suggest the decline remains intact, the developing DOWN-CRASH setup was confirmed only by not rejecting the open's collapse. Not also accelerating again into the close . Overnight action's new info... (nearby chart is last intraday session and Globex) The late blip-down's recovery initially extended higher to 3228.25. Hovering there narrowly was interrupted by a dip to 3223.00 into Europe's opens. It wasn't much longer before the dip recovered to attack earlier highs. And it wasn't much longer before the recovery was rejected, now attacking yesterday's last-minute low down to 3220.25. If, then... (notes to accompany the Tour recording) Not producing another collapse today would undermine the DOWN-CRASH setup. Only undermine it, and not reject it, which only a rally could do. Without a rally -- probably requiring a gap up -- an ongoing decline of some sort remains likely. Today's session is still historically liquid, and full of wild cards, from portfolio window dressing and tax maneuvers, to market-to-market and Wednesday's halt. First Trade... (preliminary indications for the Bias parameters) [Parameters were published last night with the wrong handle, which has since been updated.] Exiting the open at 9:45 above 3220.75 would be unlikely to trigger the 3217.75 bias-down signal at 10:15. Exiting the open under 3225.25 would be unlikely to trigger the 3228.50 bias-up signal.

And a Dry Cleaners morning, but that's just adding volatility. Trump-Iran saber rattling may be a new theme to identify trades, which we'll discuss at this afternoon's Market Wrap. It triggered the pre-open dip back down to 3223.00 overnight lows, and its break lower to test 3220.00. Despite recovering the reaction, the open was greeted at 3216.75, and the first 2 minutes overlapped 3214.50 down to 3213.00. All of which had developed gradually. The real excitement came in the next 2 minutes surging 9 points up to 3222.00. Probing higher to attack 3227.00 took too long and wasn't maintained. Its reaction down just attacked the open's 3214.50 low to within 3 ticks.

And that's despite recovering the 3217.75 bias-down signal's test to trigger no-bias, putting into play an offsetting test of its 3228.50 bias-up signal. But we expected the detour, because the "Dry Cleaner's Morning" setup formed (3 of the first hour's 5 15-minute checkpoints overlapped the same relevant level, yesterday's ~3223.00 close). The setup's usual inertia is instead allowing weak hands to retest the bias-down signal before rallying to the bias-up signal.

The no-bias and its upside objective would be neutralized by exiting the bias environment under its 3211.00 bias-down target. Otherwise, 3228.50 would become unfinished business above, even if the detour were to probe fresh session lows.

TUE afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 3219.50 3220.50 ...would target 3226.25 3227.25 Bias-down: under 3213.50 3214.50 ...would target 3205.75 3206.75 Signal status: NO-BIAS . BIAS VIDEOS... INTRO // EXAMPLE 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.

Done for the year? The post-open surge up to 3226.75 had extended too late and only reversed back down through the morning. The open's 3213.00 low was attacked down to 3214.25 as the bias environment began lapsing. Reacting up to 3220.00 only ranged sideways through the noon hour and into the afternoon bias environment. Neither bias signal was touched while triggering no-bias. The window's price action should be contained between 3214.50-3220.50. But... This morning's 3228.50 bias objective became "unfinished business," and might attract price higher. Also, still hovering around the 3216.75 open suggests that trending away from it in either direction would begin aggressively. So, suddenly printing fresh afternoon highs could extend up to 3228.50, although not necessarily any higher. And probing lower would be credible for drifting down into the close.

PLEASE HAVE A SAFE AND HAPPY NEW YEAR'S !

Tuesday's open was greeted by tumbling from the overnight range back to Monday's 3217.25 low and lower. Blipping-down to 3213.00 tested a well-telegraphed support at 3214.50, then snapped back up sharply to unchanged at 3223.00. The delay in extending higher suggested that another blip-up would fail. Blipping-up to attack 3227.00 reversed down to 3214.25 through the morning. Having triggered no-bias while holding a test of the bias-down signal, an offsetting test of the 3228.50 bias-up signal was put into play. Its test would have to wait for the morning's detour down. But the noon hour's sideways ranging indicated that sponsorship of either sort was done, letting the balance of the session drift up to the morning's objective. New Year's Eve wild cards produced a  surge to 3235.25 in Tuesday's very last minutes. Be sure to watch today's Market Wrap recording for a description of the open's "Dry Cleaners morning" setup. Especially note how its usual reflection of weak-handed sponsorship, when combined with the higher bias objective, meant something quite different from its usual inertia. Its contrarian environment signaled to expect a morning drop and its afternoon recovery. Tuesday afternoon's rally barely touched Monday's last relative highs at 3229.50-3232.25 until those very last minutes. Its last-second 3235.25 high completed a 61.8{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} correction of Monday's opening collapse. The strength came too late to be predictive, or even to undermine a pre-existing setup, and that context suggests the correction's strength only stretched the rubber band to snap back down again. So, the DOWN-CRASH setup development remains intact. Its decline should be obvious Thursday if the setup remains valid. Details and other markets coverage are discussed in the post-market Wrap recording here. CHARTROOM WILL RE-OPEN WEDNESDAY AT 6:00 ET WITH GLOBEX.

THU morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 3234.00 3235.00 ...would target 3241.50 3242.50 Bias-down: under 3225.25 3225.25 ...would target 3216.00 3217.00 Signal status: BIAS-UP, BIAS-UP TARGET MET . BIAS VIDEOS... INTRO // EXAMPLE 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.