Playing out fast than necessary. The overnight drop to 3033.50 was produced by a China trade headline when 3050.50 was being tested. That was in-line with my bearish posture I began describing in yesterday's Market Wrap. But my pre-open guidance suggested that before a downleg could be credible, correcting the initial China headline's reaction to 3046.00 was likely. A spike up already touched 3046.00 before the open, which then reversed immediately back under the setup's 3043.25 sell signal. And soon extended under the pattern's 3038.75 inflection point. All of which was pretty quick. Unnecessarily quick -- not so much as to disqualify the reversal, but unnecessary.

Unnecessary, but credible. And not slowing down. The drop triggered a renewed bias-down, and has already extended down to 3025.50.

Be aware of the potential for a corrective bounce. If tested it should be limited to testing 3033.00-3035.50 as resistance. Closing above 3033.00 is the minimum requirement to invalidate this morning's very bearish behavior. Meanwhile, the renewed bias-down target is 3022.50, which would likely be a formality on the way to 3013.00-3014.00, or lower.

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... (summary of last Market Wrap) Overnight ranging into Wednesday’s open plunged from 3039.00 back down through the 3032.00 overnight low to 3023.25. A 3029.00-3035.00 range that awaited the afternoon’s FOMC events also plunged, stopping optimistically short of the earlier low within 2 points. The balance of the session rallied, eventually retesting overbought RSIs at Tuesday’s 3046.25 high up to 3049.00. RSIs became overbought again, and left outstanding by a reaction down to 3042.00 before the close. Overnight action's new info... (nearby chart is last intraday session and Globex) A last-minute bounce into Wednesday’s close had extended to 3055.00 before the Globex open as AAPL and FB announced earnings. Flat-to-lower ranging back down to 3044.50 started firming again by midnight and reached 3051.00 at Europe’s opens. The pattern might still be ranging sideways — and still lacking complexity at its highs that would otherwise form a “new Globex trend extreme” — if not for a China trade headline. It triggered a collapse down to 3039.25 that extended temporarily to 3033.50, but now a bounce is testing as 3039.25 resistance. If, then... (notes to accompany the Tour recording) Yesterday I described how the rally has reached a fork in the road, not simply for the price being tested but for the path taken to arrive there. And it’s not just the lack of upside attractions, without putting into play higher objectives. Most of the challenge is the consecutive optimistic sessions with only intermittent shallow pullbacks, while still only overlapping prior highs. Last night’s China trade headline reaction may reflect the rally’s sudden lack of sponsorship. It’s likely to be retraced or at least corrected before a more credible downleg begins, so an early sell signal will depend on that having happened yet. Regardless, closing back under the recent range’s 3033.00 lower-end should tart to signal the bearish sentiment gaining traction. The downside risk probably needs to start developing Thursday if it is going to develop at all. Otherwise, two consecutive higher closes above 3050.50 are needed to signal the rally is extending. First Trade... (preliminary indications for the Bias parameters) Exiting the open at 9:45 under 3037.50 would be likely to trigger the 3039.50 bias-down signal at 10:15. Exiting the open above 3042.25 would be unlikely to trigger bias-down

THU afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 3039.75 3037.50 ...would target 3045.50 3043.25 Bias-down: under 3027.50 3025.25 ...would target 3020.25 3018.00 Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL . 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.

Gap-and-go morning? This morning's 3044.00 open was only 2-5 points under yesterday's close, so not much. The first hour did trend down relentlessly, and not by a little, down to 3020.25. Sideways ranging since then is in-line with a gap-and-go setup. If maintained through the close, Friday's price action would likely correct before resuming today's decline on Monday. Fresh lows this afternoon would simply be likely to extend,especially after the no-bias environment had begun lapsing. Meanwhile, the corrective bounce is holding. This morning's low only overlapped its 3022.50 target, then bounced up to 3033.00. Room for noise has expanded up to 3037.50, while still allowing sellers to gain traction.

An artificial collapse from 3050.50 down to 3033.00 was triggered by an overnight China trade headline. That could have marginalized sellers, but its 61.8{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} correction to 3046.00 before Thursday's open also collapsed, organically. Dropping to its 3022.50 renewed bias-down target held for the day, but never recovered the overnight low. Ultimately, it was buyers that were marginalized. And Thursday was an important session to behave bullishly or bearishly. Wednesday's post-close Market Wrap described the predictive value to closing beyond the 3033.00-3050.50. Not only closing below it, but holding under it while the afternoon consolidated the morning's gap-and-go forms a bearish setup. Friday's late surge probed back above 3033.00 in literally its last minute before the 3036.00 cash session close, which is where futures settled. That's not a close under 3033.00, even if its surge was weak-handed month-end portfolio sponsorship -- which it likely was. Bouncing further Friday morning is possible, and would be likely to resolve down that afternoon or Monday. But now closing under Thursday's low would also qualify as confirming its reversal. Closing Friday or Monday under Thursday's 3022.50 support test would be decisive if also closing under 3013.00-3014.00. Closing again above 3033.00 would negate Thursday afternoon's ranging below it. But only closing above 3050.50 would indicate the rally has resumed. Details and other markets coverage are discussed in the post-market Wrap recording here. Monitor overnight Globex trading in the chaRTroom here.

FRI morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2041.75 3039.50 ...would target 2048.75 3046.50 Bias-down: under 3029.75 3027.75 ...would target 3023.50 3021.50 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.