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 night's limit up to 2582.00 extended only higher only briefly to 2624.00 and quickly reversed back under 2601.00 to reverse momentum down. Rejecting session-long rally" setup made its influence as bearish as it would have been bullish. Combined with Thursday afternoon's bearish PM traction setup, Friday morning trended down to 2476.00. Trending back up through the noon hour marginalized sellers for the day. The flat-to-higher environment ranged choppily sideways into Trump's press conference. A brief dip to 2511.75 stretched the rubber band to snap back up, extending relentlessly higher through the close to touch 2697.25. Overnight action's new info... (nearby chart is last intraday session and Globex) Regardless of their catalysts, last-minute breakouts from intraday ranges tend to be corrected, if not fully retraced back to their origin. Especially on Fridays. Usually. If anything can qualify as an exception, then surely it would be the Fed's surprise 100 bp rate cut, announced just one hour before Sunday night's open. Uh, no. Globex immediately collapsed to 2555.50, the 5{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} limit down, where price continues to sit eerily to this minute. Coincidentally, that's 38.2{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} back into Friday afternoon's range, and 61.8{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} back down to Friday's post-open low. If, then... (notes to accompany the Tour recording) Thoughts, in this order:

The likely correction, retracement, or reversal of Friday's last-minute breakout would have targeted at least its 61.8{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} down to 2588.00, or entirely back down to its 2522.00 origin, if not also reversing down into the opposite direction. Last night's limit down didn't halt price action, only price discovery, while also encouraging sellers and inhibiting buyers to act (or not to act) accordingly before limit down would be met. So, we don't know whether unbridled trading would have snapped back up above 2588.00, held a test of 2522.00, or reversed the direction to down. The well-intentioned (or self-serving) limit only exacerbates the sentiment that triggered it, so the the question is whether conditions improved or deteriorated during the cooling-off period. And even if they deteriorated -- like Australia dropping 9.7{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} and Nikkei worsening -- did that bring markets line with each other, or create a vacuum below. The last two opening 7{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} halts of this series re-opened lower before quickly snapping back up, and Friday's gap up from its overnight limit snapped back down. So, this third time should be more reluctant to reverse, and likelier to extend (down). I can't say whether the next curb will ultimately hold its -7{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} 2501.00 limit, or more fully exploit its 2340.00 -13{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} limit which could also neutralize the "unfinished business" at 2526.00 and 2380.00. But I'll be reluctant to buy while one or both remains outstanding. The market's biggest fear is whether it will be halted from trading for multiple days, which in my opinion is not being considered, having watched Treasury Secretary Mnuchin respond multiple times to that question on the Sunday shows. But ultimately it's Trump's decision, and it's certainly possible that he falls victim to the same "sell at the bottom" mentality that afflicts every rookie trader.

First Trade... (preliminary indications for the Bias parameters) Current trading is well under this morning's bias parameters.

Hope springs eternal.

Is the circle of life being denied again? I'm grudgingly looking at buy signals, but remaining prepared for lower lows this afternoon...

Last night's 2550.50 5{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} limit down re-opened at the 2501.50 7{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} Level-1 trigger, which immediately halted trading for 15 minutes. Re-opening at 2445.50 collapsed immediately to within 10 points of the 13{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} collar at 2350.00, and soon began bouncing. That bounce just attacked 2509.00. Which is surprising. Last week's two prior 7{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} halted re-openings reacted up, but only temporarily, which should condition those buyers not to buy. Or, at least, to sell sooner. True, the two pieces of "unfinished business" below are now neutralized. But already probing back into Friday afternoon's range is premature for a durable recovery. Too optimistic too soon. I had suspected that having avoided the 13{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} Level-2 twice last week, only to be faced with yet another Level-1, it is human nature to seek Level-3. Well, if not today, then maybe next time. Maybe this afternoon. The "hope springs eternal" space is where short-sellers can thrive, which I'm giving a benefit of the doubt until a relevant level is recovered.

The next opportunity to isolate sellers would begin by recovering above 2540.00 into the noon hour. Otherwise, if recovering isn't actually the market's intent, then it wouldn't be surprising for this afternoon to probe new lows.

MON afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2556.00 2542.00 ...would target 2580.00 2566.00 Bias-down: under 2502.00 2488.00 ...would target 2464.50 2450.50 Signal status: BIAS-DOWN . 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.

This next step is kind of important. I'm still surprised that the third halt in this range produced a third bounce. But hope springs eternal. Also, store shelves in the toilet paper department are empty, so one can make do with broker confirms, I suppose. The bounce's peak wasn't surprising, exploiting a 61.8{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} retracement back into Friday afternoon's range at 2548.50. The range that had launched the closing surge. Reacting down more than 100 points since then has triggered this afternoon's bias-down, and is already probing its bias-down target by 10 points down to 2440.50. Being a bias-down environment, the slide can continue. And nothing has changed from this morning's potential for resolving the bounce into another downleg, which would then likely extend through Tuesday's open. Otherwise, closing back above this morning's high would help to form a bottom. So, this next step is kind of important.

Pick your meme: Hope springs eternal vs. Pavlov's dogs. It was surprising that Monday's Level-1 7{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} halt resolved similarly to the last two from last week. Quickly snapping back up and avoiding fresh lows swung nearly 200 points from 2350.00 up to 2548.50 (1425 Dow points). Apparently Pavlov's dogs were hoping THIS could finally be the bottom. Bad dog. The balance of the session trended down to 2370.50 for a 325-point loss (3000 Dow points). A last-minute surge up to 2432.00 came too late to be more than noise. Nothing throughout Monday's session alleviated the potential for resuming the overnight decline. Retracing the morning's post-open rally suggests that vulnerability remains intact. Coming to within only 10 points of the morning's spike low suggests buyers remain overly-optimistic, which is potentially bearish from a contrarian perspective. Sessions that include a halt are disqualified in my work from serving as a low, although their subsequent retest could help to form a bottom. Regardless, I don't need to see a 20{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} Level-3 halt, but I suspect a Level-2 13{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} halt will appear 1-2 days prior to an actual turning point. Trending down into Monday's close activates the afternoon bias environment's 2496.50 for signaling a session-long rally Tuesday. Nothing requires its attempt, but it should be noted how entrenched yesterday's selling became. I'll still look at buy signals, albeit mostly grudgingly, but the trend likely remains down. 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. Monitor overnight Globex trading in the chaRTroom here.

TUE morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2435.00 2431.00 ...would target 2477.00 2463.00 Bias-down: under 2378.25 2364.25 ...would target 2352.50 2338.50 Signal status: NO-BIAS, TESTED BOTH BIAS SIGNALS . 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.