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

NEW 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... Thursday's noon hour drop fell nearly 23 points to 2457.00 at the afternoon bias environment low. This tested the "lower prior highs" and gap outstanding, singularly represented by 2458.50. They held their test, as any lower would have entered a meltdown threshold -- highly unlikely during the same session that prints a new trend extreme in the opposite direction. A 16-point reaction up to 2473.00 avoided that, and also avoided closing under Friday and Monday's 2462.75-2463.50 lows, which would have signaled a trend change. Overnight action's new info... The afternoon's recovery also closed above Friday and Monday's 2469.00-2470.50 highs. That would have been outright bullish, except the recovery extended to test Tuesday and Wednesday's 2473.50 "higher prior lows." Having neutralized its attraction, Globex immediately began reversing down to 2462.25. Flat-to-higher ranging up to 2467.00 wasn't swayed much either way by Europe's opens. A dip to fresh overnight lows at 2461.50 (which yesterday's last reaction down held instead of triggering a new downleg) was recovered nearly entirely back up to 2467.00, and now sits at this morning's 2465.50 bias-down signal. If, then... Even the most bullish resolution would not necessarily avoid probing negative territory Friday. But most bullish scenarios must recover that probe through a relevant timing window. Invoking the Friday Factors -- a short-squeeze triggered by two days of impending illiquidity -- could end the week back in safe territory. Meanwhile, a Head & Shoulders pattern has begun forming. It's not very symmetrical, but that would be offset if the ferocity of its right neckline (the plunge into yesterday's low) were duplicated Friday, also triggered by Friday Factors. First Trade... [Click here to view the Bias parameters] Exiting the open at 9:45 under 2463.50 would likely trigger the 2465.50 bias-down signal at 10:15. Exiting the open above 2469.00 would not be likely to trigger bias-down. Phonetic dictation... well looks like I miss some of the fun that yesterday when I left at the final hour but we caught some good stuff some intentionally some luckily this pattern needed to extend higher we gave buyers a little benefit of the doubt that the opens Gap up even if it didn't extend would initially would extend eventually and they didn't give it up not through the bias environment so that benefit of the doubt went that far at least sellers were marginalized for the morning but not the afternoon which plunged through its inflection point down and Down and Down but we did catch by having working levels having levels working as to what would it ecline hit what levels couldn't hit what would be the maximum levels it could hit hit the maximum 5850 are oversold there so they require retest eventually but all other factors said that was at like 5850 was only being overlapped at the low despite being probed by several bars lower and lower and so the calculable reaction up with 6550 that was hit that was responsive back under 6150 would signal momentum reversing down keep that in mind or 6150 would signal momentum reversing down and it was pierced it was pierced by only three tix at its lowest point and only overlapped and of course I was here at the for the final hour but the final hour did rally back that rally back recovered 61861 .8{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} of the the drop actually got a little bit higher the cash session Futures closed pretty much at the 61 8th was an interesting relationship here as well we get rid of ticks and get to the bid on the highs we basically have a nice little 61 Nitra Trey Smith extend 60181 relationships in here I won't go through the mall with the point is that this was not new sponsorship that triggered the recovery that took price even higher than the 6650 then we looked at originally even the higher highs that was just a reaction it's all part of the same leg it's really interesting that what was avoided we'll come back to that in a moment what was avoided was a trend change so in other words new High clothes interim dip High clothes there's no higher hi I'm planning out a higher high subsequent to that if there were one but even the higher 108 hyzaar overnight High's don't do it had that interim low been broken through the clothes we'd have a trend change not only did that overnight low or I'm sorry the interim low which actually is Friday and Monday is Lowe's not only did that hold Friday and Monday size we recovered as well know they overlapped and they not been overlap and recovered as well that would be outright bullish this wouldn't be that I also went on to test what is a normal it's morning where to probe lower weather that where to probe under Friday's low or the probe negative territory whatever that might have been is what even in the most bullish inerio even in a recovery at having recovered and avoided the trend change still potential for the morning to have follow through so let's move forward and in fact we have followed through overnight and got to a certain point it actually got to the point where I basically we're yesterday's bias environment had gotten to it 120 as of 1:20 bounced noticed something I talk about this every day and today I'll say it in a different way your UPS opens didn't influence overnight Market and as we talked about intraday that doesn't happen you don't reverse the trend on the same day it just doesn't it's why I don't ever have a reversal signal on the same day as a trend extreme but that was yesterday for a slightly aggressive attempt to reverse the trend is repeated today it will succeed if this aggressive attempt yesterday to reverse the trend is not repeated today it won't succeed will be looking at new highs soon enough he have a resumption or repeat that is of yesterday's big down leg is a voided today and it can be attempted so long as it's recovered again through email back above Lowe's window it cetera we close lower if we close from this hype back under yesterday's low that would be close enough to duplicate might want to get a couple points in there just for decisiveness I don't think the market will have any problem doing that if that's the case if it's not rejecting yesterday's well it is unfolding a big head and shoulders and we'll talk about that Saturday at the Saturday review one way or the other because there's some very specific targets the upside and of the downside if there's no attempt to try to repeat yesterday's decline the upside is still 2484 2490 that hasn't changed if there is an attempt to try to repeat yesterday's downside that does recover intraday that'll actually give us much higher Target's to the upside again these are levels and constructs will examine more deeply Saturday and the Saturday review but know that this is a very pivotal point alright let's look at other markets currency 25 this can just continue eating hire 50 is it started finally natural gas and I said very very bullish Behavior yesterday both in terms of the responsiveness to the 295 by signal especially having neutralize the attraction below just the prior day and then the restrained optimism to hover here it's not pessimism but restrained optimism just shade off of pessimism over here above 295 using 295 is support looks good looks bullish and overnight forward here overnight holding up I don't have really any spread or and the the roll over to the front month from August to set and price to pretty much the same levels alright any questions let me know I need the recording here running late for that but I will see you at the open all right good luck today .

Opening surge falls flat. The overnight dip to 2461.50 from2467.00 had recovered entirely before the open. The open blipped-up to touch 2469.00, and then reacted down 4 points. The ultimate resolution to that test at 9:45 would make the 2465.50 bias-up signal more or less likely to trigger at 10:15. But another bounce touched 2469.00 at 10:15. Buyers had a chance to test 2465.50 from a position of strength. Not for lack of trying, the chance wasn't exploited. Neither was it rejected, but retesting 2469.00 reacted down to test 2465.50. That also resolved down. The grace period was invoked, but late bias-down has triggered and 2462.00 was just touched. Testing and recovering from a retest of yesterday's lows and this morning's 2458.50 bias-down target could satisfy sellers for the balance of the day to recover. Meanwhile, just retesting yesterday's lows need not recover. It's not timely, so it's not optimal, but it's still credible for duplicating yesterday's plunge.

FRI afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  2471.00 2468.25 ...would target  2476.00  2473.50 Bias-down: under  2466.00  2463.50 ...would target  2461.25  2458.50 Signal status: NO-BIAS 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.

No-bias afternoon underway. This morning's reaction down from 2469.00 had triggered the 2465.50 bias-down signal late, and then extended to 2462.00. That had firmed back up to 2465.00 when news broke that N. Korea had resumed its effort to destroy the Sea of Japan. That triggered a knee-jerk reaction down to touch the 2461.50 overnight low. Which triggered a knee-jerk reaction back up to 2465.00 and through it. The noon hour was entered at 2468.00. This morning's 2458.50 bias-down target is unfinished business below. But there's no timing to its eventual test. Especially with this being a Friday, now a Friday afternoon. This afternoon's no-bias signal won't be of much help, and the balance of the session may simply persist in negative territory. Having said that, back above 2468.25 would being signaling another recovery attempt underway. Natural resistance lies above at yesterday's 2473.00-2475.00 close. There is otherwise room down to 2458.50, but any lower when the bias environment lapses could slide sharply into the weekend.

Duplicating Thursday's plunge on Friday would have confirmed the pattern I warned of in the morning's Market Tour. That is a lopsided Head & Shoulders, its asymmetry due to the right side developing much faster than the left. Simply extending Thursday's drop through Friday's close would have been bearish, as well. But for a different reason -- another attempt at confirming a trend change, after Thursday's attempt had been absorbed. One day does not a pattern make, let alone an exception. Thursday's sessions have learned that lesson, since neither of the two bearish patterns was confirmed on Friday. Often, failed bearish behavior has a bullish consequence. Had Friday not been an inside day and first probed fresh lows, then much higher objectives would have become targeted. Instead, upside potential to 2484.00 and 2490.00 remains intact. None of which need develop immediately on Monday. Only gapping down sharply Monday could overcome that. Meanwhile, Friday's intraday rally reached an important target after the N. Korea missile missed its. that was 2470.50, whose recovery would have left no excuse to further delay extending to fresh highs. Instead, Friday's close was similar to Thursday's late test of "higher prior lows" that resulted in an overnight retracement. Gapping up sharply is needed to overcome another intraday pullback. Details and other markets coverage are discussed in the post-market Wrap recording here.

Join us for this weekend's Saturday Review at 9:30am ET. We'll review the bigger picture, and do instant chart analysis of your requests. The link will be emailed early in the morning.

MON morning signal (triggered at 10:15 ET) SPX ES Bias-up: above  2476.00 2473.50 ...would target  2481.25  2478.75 Bias-down: under  2468.00  2465.50 ...would target 2461.00  2458.50 Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL FAQ 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.