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

DAILY SCHEDULE Watch the pre-open Tour recording* HERE <<== *Manually open Adobe Connect (install on Windows or Mac), then paste the recording's link there. chaRTroom is now open... Pre-open update is at 9:15 ET

Through the prior close... (summary of last Market Wrap) Thursday's open was greeted by an overnight 53-point drop to 3239.75 from Wednesday's 3292.75 high. Its likely correction bounced 25 points through the open. A post-open drop bounced 22 points into the noon hour. Repeatedly recovering 3257.00 -- including another dip into the afternoon -- had formed a short-squeeze setup. Its likely objective was far exceeded up to 3292.00 and then to 3295.00 through the close -- probing Wednesday's highs. Overnight action's new info... (nearby chart is last intraday session and Globex) The Globex open immediately began retracing the short-squeeze back down to test the cash session's last-minute at 3284.75. Its reaction tried to resume the rally, very quickly probing higher to 3297.50. But only ranging sideways there suddenly began sliding at midnight. The slide has been relentless, and substantial, recently touching 3265.75. Its reaction is now testing 3279.00. If, then... (notes to accompany the Tour recording) Did yesterday afternoon's squeeze reset the decline from last week's highs so it may now resume? There are two possible templates: possibly, and possibly not...

1) Possibly, the decline can now resume. Last night's slide isn't sponsored by impatient sellers like Wednesday night. Last night's slide isn't extending an afternoon decline, and so far it's only retracing an upleg. There's still room below to attract reinforcements to extend even lower.

2) Possibly not, the decline already finished correcting. Three substantial efforts at already resuming the decline yesterday all failed, which is what had warned of the short-squeeze. Last night's slide has erased the squeeze's excessive optimism, and so far its measurement qualifies as a constructive pullback.

The predictive lines in the sand ["plits" - (TM)] between trending back down today or resuming the recovery are 3256.00-3258.00 below, and 3281.00-3283.00 above. Exiting a timing window beyond either would create a position of weakness or strength, respectively. Alternatively, another clue could come from triggering bias-down, unless its bias-down target is already tested like yesterday's two bias signals did. Any of these levels can be used for gauging whether an opening thrust is gaining traction, or being rejected -- especially today, which is increasingly influenced by Friday Factors. First Trade... (preliminary indications for the Bias parameters) Exiting the open at 9:45 under 3273.00 would be likely at least to trigger the 3276.25 bias-down signal at 10:15. Exiting the open above 3281.00 would be unlikely to trigger bias-down.

And it's still an inside day. Now we know whether the overnight drop to 3266.00 was correcting yesterday afternoon's recovery attempt, or rejecting it. Pre-open bounces up to 3280.00 were tests of the 3279.00 level that was one of yesterday afternoon's short-squeeze targets. This time the target's resistance held. Trending down relentlessly through the 3275.50 open -- already down 22 points from the 3297.50 overnight high -- is touching yesterday afternoon's 3241.00 low. Breaking under yesterday's 3239.75 pre-open low would be only a formality on the way to 3237.50 and 3227.00-3228.00 or even to 3214.00. Eerily, both 1-minute and 3-minute RSIs avoided returning to oversold during much of this morning's collapse. Sellers aren't expending much energy, and they're being well-rewarded. That doesn't preclude a bounce, but look out below when sellers do start pushing harder. Exiting the bias window back above 3251.00-3257.00 would be bullish, or at least rob sellers of their traction to prevent a much uglier afternoon.

FRI afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 3252.50 3251.00 ...would target 3558.50 3257.00 Bias-down: under 3238.25 3236.75 ...would target 3230.25 3228.75 Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET . 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.

Testing critical levels. Friday Factors can cut both ways. The weekend's two days of impending illiquidity adds a new influence to price action. Strong morning trending can attract reinforcements wanting to position before the weekend, whether to participate or to get out of the way. And that added influence can exacerbate the move. That exacerbated move can fully discount all of its influence by noon. The balance of the session often then ranges sideways, or even retraces some of the morning's move. Reactions aren't the product of counter-trend sponsorship, but of the trend's sponsorship being done.

Today may be different. The noon hour trended throughout and the bias environment is being entered at a fresh extreme. RSIs diverging positively have had little directional impact, as only a couple of brief bounces produced little more than fresh lows.

As the drop from overnight highs was approaching a 40-point drop at 3257.00, I told the chaRTroom it might sound silly, but any lower could start to get ugly. Now the next lower objective at 3227.00-3228.00 is being probed down to 3222.00, targeting 3214.00 and potentially 3175.00-3180.00. A bigger more durable bounce is possible today, but the burden of proof is on buyers. Meanwhile, the trend is down.

Already trading down 31-32 points from its 3297.50 overnight high, Friday's 3275.50 open still could have recovered to resume Thursday afternoon's recovery. It most certainly did not, instead collapsing 43 points throughout the morning bias window and through Monday's prior lows down to 3232.00. The trend would persist for the balance of the session, including 3 separate 15-16 point bounces. Lower targets put into play under 3251.00-3257.00 were tested at 3227.00-3228.00, and then 3214.00 (down to 3212.75). The 85-point drop from overnight highs reacted up to 3227.00-3228.00 through the close. One of the Friday Factors is the potential for exacerbating a strongly-trending morning, as the weekend's impending illiquidity attracts sponsorship. Usually that is weak-handed sponsorship, identified by the afternoon only ranging sideways or retracing. This Friday probed lower. The morning's lows did not hold. The burden of proof is very much on buyers, and we'll discuss the bigger picture during Saturday Review. See details and other markets coverage in the post-market Wrap recording* here. *Manually open Adobe Connect (install on Windows or Mac), then paste the recording's link there. JOIN US AT 9:30 ET FOR THIS WEEKEND'S SATURDAY REVIEW.

MON morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 3234.25 3232.75 ...would target 3241.50 3240.00 Bias-down: under 3224.00 3222.50 ...would target 3218.00 3216.50 Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED . 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.