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... Tuesday's drop was not immediate, but its delay was brief and its resolve was relentless. Monday's rally can be characterized similarly. Optimism ahead of the new Fed Chair's first ever congressional testimony had been largely discounted. Tuesday's outside day finished the discounting early by adding 9-1/2 points above Monday's cash session high up to 2789.75. Did it also overly-compensate by eventually probing 9-1/2 points under Monday's low down to 2743.50? Overnight action's new info... That over-compensation shrank before it got wider. And then it shrank again. Firming to 2754.50 was rejected by a dip to fresh lows at 2738.50. Recovering steadily through midnight persisted into and out of Europe's opens until touching the earlier high. Now its reaction down to 2746.00 has formed an inverted Head & Shoulders pattern. If, then... Yesterday's dip had been consolidating at or above its lowest projected support at 2749.75, until coming to within 3 minutes of the cash session close. A last-minute dip contains the session's lower lows, which tested "lower prior highs" at 2743.00 through the futures close. Both of these relevant levels have yet to be broken during a relevant intraday timing window. Which would likely extend yesterday's downtrend through this morning. Otherwise, maintaining an open above yesterday's lows -- then extending it through the open -- could form an Isolation pattern to reinstate another multi-session rally. Meanwhile, the overnight Head & Shoulders influence must be obvious during that same initial 15 minutes of volatility to be influential intraday. This is equally true for any overnight pattern's influence, and a Head & Shoulders pattern's influence can be bullish or bearish, with specific measurements targeted in either direction. And extending down to the lower targets would be in-line with the 1987-style crash template that's still tracking. First Trade... [Click here to view the Bias parameters] Exiting the open at 9:45 under 2753.25 would be unlikely to trigger the 2755.75 bias-up signal at 10:15. Exiting the open under 2740.75 would be likely to trigger the 2744.50 bias-down signal.

Post-open extends the overnight recovery. The inverted Head & Shoulders pattern that had developed overnight ultimately held its 2746.00 shoulder. The open was greeted by probing 2 points above the 2754.25 neckline, and the opening bar added 2 more points. The opening 15 minutes of volatility trended back down, which is not optimal for an Isolation setup. It still gets a benefit of the doubt, so long as negative territory is still avoided this morning. And continuing to fulfill the setup would continue to make this afternoon likely to rally.

I'm giving the Isolation setup a benefit of the doubt, despite its open not being optimal, because the open's dip maintained its recovery above yesterday's lows, especially its optimal 2749.75 support level. The next 15 minutes extended to a fresh high at 2762.00, and its reaction down held the 2755.75 bias-up signal in time to trigger.

None of which prevents a deeper post-open dip down to 2744.50-2746.00. RSIs aren't improving, and multiple attempts to resume the recovery are each being met with multi-point reactions down. A detour is possible, even if we knew with complete certainty the bias-up and Isolation setups will be fulfilled. Otherwise, reacting down too deeply would invalidate a recovery, and next target 2729.00 below.

WED afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2750.50 2750.50 ...would target  2756.75  2757.00 Bias-down: under  2740.75  2741.00 ...would target  2735.00  2735.00 Signal status: LATE BIAS-UP FAQ Flowcharts: Bias-UP // Bias-DN 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.

Busted bullish setups haven't defaulted to bearish. Price action in between Fed Chair Powell's congressional testimonies continues to be choppily range bound. That range is repeatedly testing support below, so there's no assurance of the range persisting.

The open's Isolation setup barely triggered by maintaining the open above yesterday's low, despite immediately retracing down through 9:45. Ultimately, the morning probed 6 points under yesterday's low down to 2737.50, which isn't optimal. And it doesn't get a benefit of the doubt.

The morning's 2754.75 bias-up signal triggered cleanly at 10:15 but it was never more productive than the 2762.00 test before then. So, exiting the bias environment under its 2744.50 bias-down signal was eligible to invalidate the bias-up, so its 2764.00 target doesn't become "unfinished business above."

Sellers tried to exploit the rejections, and the noon hour dipped to 2741.75. But rallying into the noon hour's exit up to 2754.00 has triggered a late bias-up above 2750.50. Exiting the bias environment under 2741.00 would invalidate it -- for a third window in two consecutive days. Back under 2744.50-2746.00 would start to make that likelier.

The Fed chair's two-day congressional testimony used to be consecutive days. And the second day was reliable for reacting differently than the first, as the first day's comments were already discounted or walked back. Without immediately walking back Tuesday's surprisingly hawkish comments, did Wednesday's pause give Tuesday's drop an opening to extend? Monday's rally had become excessive optimism, silliness ahead of the new Fed chair's first congressional testimony. Tuesday's outside day proved that, ending under Monday's low. Leaving the question for Wednesday, whether it would essentially range sideways while awaiting Thursday's second day of testimony. Overnight action tested fresh lows but recovered enough to form the basis for an Isolation setup. And the morning's bias-up signal triggered.

That's a lot of bullish potential. So much so, that I warned overwhelming it must be done by substantially stronger-handed sellers. It was undone by much stronger-handed sellers.

Peaking 2 points short of the morning's 2764.00 bias-up target was reversed to probed 1 point under the 2738.50 overnight low. The afternoon's rally peaked upon probing 6 ticks above its 2757.00 bias-up target, then plunged 47 points through the close. And the close easily probed under 2729.00 "lower prior highs" down to 2712.00. Is the 1987-style crash template playing out? Inflecting down instead of up wasn't necessary, but inflecting down, it is. Crashing instead of only probing prior lows isn't necessary, but the minimum 2509.00-2511.00 objective will seem that way. Perhaps the only chance to avoid falling over the edge is to rally early Thursday, and to rally sharply. A shallower bounce would remain highly vulnerable to trending down into and out of the weekend.

Details and other markets coverage are discussed in the post-market Wrap recording here. Monitor overnight Globex trading in the chaRTroom here.

THU morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2726.00 2726.00 ...would target  2732.00  2732.25 Bias-down: under  2707.25 2707.50 ...would target  2698.25  2698.25 Signal status: LATE NO-BIAS, TESTED BIAS-DOWN SIGNAL FAQ Flowcharts: Bias-UP // Bias-DN 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.