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... Despite surging in reaction to the ECB policy statement, Thursday morning was spent in decline.Its drop had originated during a bias-up environment, so its 1981.75 bias-up signal required an eventual recovery. An interim drop tested the 1960.00 bias-down target to 1958.00. But the afternoon bias environment rallied into the position-squaring window until piercing 1981.75 by 2 ticks. No traction was gained for the effort. Overnight action's new info... Thursday afternoon's recovery has extended. The open's 1995.50 high was attacked by midnight, and the 2001.00 pre-open high was probed up to 2002.25 soon after Europe's opens. A pullback to 1995.00 has recovered. If, then... One thing favors extending the rally: Gapping up is the appropriate way to immediately resume it when no traction had been gained for the effort. This being a Friday when trend reversals have a brief window of opportunity, extending the rally can become likelier if the gap up is extended through yesterday's pre-open high. That's difficult since a prior extreme can be more resistant to a gap than to trending. And trending relentlessly overnight is easier to reverse intraday. Holding the prior high's test through the open would become attracted to filling the gap at yesterday's close under 1980.00, which could extend easily into negative territory with so much room having been carved out by the prior three sessions. So, today's direction should be determined by whether the session's first several minutes can attract new buying sponsorship in this area where it has repeatedly found sellers. First Trade... Exiting the open at 9:45 above 1993.50 would be likely to exceed the 1991.50 bias-up target at 10:15 to renew the bias-up signal. Exiting the open under 1989.25 would be unlikely to renew the bias-up signal.

Gap up is neither rejected nor extended. The 2002.25 overnight high was formed coming out of Europe's opens. It hasn't been rejected. Ranging back down to 1995.00 persisted into the open. It persisted through the open, too. Actually, post-open ranging narrowed to 1996.00-2001.50. Dry cleaners morning? Bears are undermined by not quickly rejecting the gap up to a prior extreme. By also not quickly extending the gap up, a momentary detour down becomes likely so the momentum of its recovery can boost the rally. As that detour down delays recovery, the eventual rally boost becomes less likely, or likely to be brief. Nothing requires extending higher, not today or ever. But the ongoing consolidation is forming congestion which is likely to be retested by a failed trending attempt.

FRI afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  2018.75 2009.25 ...would target  2023.75  2014.50 Bias-down: under  2011.75  2002.50 ...would target 2005.25  1995.75 Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL 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.

Late extension probes higher, on weak sponsorship. Gapping up to 1997.00-1999.50 wasn't threatened through the first half of the fist 15 minutes of volatility, making fresh highs likely. Fresh highs weren't probed much beyond 2001.00 during the first 15 or 30 minutes, making a pullback likely to refuel buyers for fresh highs at 2004.25-2005.00. Dipping to 1996.00 stretched the rubber band enough. Snapping back up probed new recovery highs up to 2005.25. Its reaction down barely touched the open's range before extending higher to 2008.00. Hovering there before the bias environment exit has persisted into the noon hour's entry, now piercing fresh highs at 2009.00. Friday morning bias can persist through the noon hour, possibly extending although not necessarily, at least preventing a durable reversal. But the timing origin of finally breaking higher does keep the afternoon vulnerable to reversing back down.

The topping template is dead. Long live the topping template. We began tracking the template last Saturday. For four consecutive sessions, the market didn't do anything not allowed by the template. Last Friday's relative high close made specific requirements for Monday, which were fulfilled. But rejected surges weren't converted into a mid-week collapse, opening the door to fresh highs. This Friday's fresh highs end the topping template. That topping template. But Friday's close was also a breakout, so a new topping template would begin tracking if Monday doesn't confirm it. And Monday's don't often confirm Friday breakouts. Meanwhile, the bigger picture is threatening new highs. The highest calculable corrective bounce limit was tested last Friday. Confirming this Friday's close above it would put into play new highs. Not confirming it would maintain the rally is a correction, and vulnerable to reversing down sharply... We'll review it all in detail at the Saturday Review. Details and other markets coverage are discussed in the post-market Wrap recording here.