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) Monday's rally eventually extended overnight from an early Globex dip to 2623.50, up to 2745.00. Tuesday's open blipped-up a little more to 2750.00 and immediately reversed down. Four-week old resistance there held its test through the opening 15 minutes of volatility to rob buyers of their traction. A quick reaction down to its counterpart held its test as support to ultimately form a position of strength. Not a position of strength required to prevent an interim dip but to make recovering from an interim dip likely. We'll see. The session ultimately trended back down to Monday's 2647.00 close and lower to 2635.00 through the close. That included a late 47-point surge that magically found time to collapse 64 points. Afternoon sellers gained traction for their efforts. Overnight action's new info... (nearby chart is last intraday session and Globex) At least overnight, yesterday's downtrend hasn't resumed. Not for lack of trying. Choppy ranging held bounces back up to 2660.00 and later up to 2680.50 resistance each reacted down sharply, to 2621.00 and 2627.00 respectively. The choppy range has narrowed around unchanged since Europe's opens, indicated to greet the open with no ongoing momentum. If, then... (notes to accompany the Tour recording) Tuesday afternoon sellers gained traction, so this morning is likely to trend down. For all of its choppiness, the overnight action has only ranged sideways, so a too-late-to-break setup is one possibility for probing lower temporarily. Meanwhile, extending Tuesday's reversal as only a pullback still has room down to the lower-end of 2516.00-2525.00 -- its upper-end is already probed overnight. Any lower through any timing window's exit would start to suggest the bear market rally has ended. First Trade... (9:45 preliminary indications for the 10:15 Bias parameters)

Exiting the open under 2666.00 would be unlikely to trigger the 2672.00 bias-up signal. Exiting the open above 2688.00 would be likely to trigger bias-up. Exiting the open above 2643.00 would be unlikely to trigger the 2621.50 bias-down signal.

Yesterday afternoon's sellers haven't been rewarded. Extending down overnight doesn't qualify as rewarding yesterday afternoon's sellers for having gained traction. Similarly, gapping up today doesn't invalidate the reward they earned. That reward is specifically to control the morning bias environment. So far, that has amounted to rejecting probes above the 2678.00 open, and then dipping to 2653.50. And at 10:15 it also meant putting into play a test of the 2621.50 bias-down signal, another reward for having held a test of the bias-up signal and triggering no-bias. But the no-bias signal was invalidated by recovering the 2672.00 bias-up signal through 10:30. And since even the dip to 2653.50 remained in positive territory, a bullish Isolation setup may be forming by rejecting the overnight probe under yesterday's lows. The "edge" of yesterday afternoon's sellers being due a reward might fail, but that should default to an edge in the opposite direction. Tuesday's breakout confirmation would be back in-play, as would the 2825.00-2827.00 target. At least a retest of yesterday's 2750.00 high would be likely tomorrow. Exiting the bias window back under its 2672.00 bias-up signal would undermine the upside, but not reject it, still keeping a burden of proof on buyers. Entering the noon hour in negative territory would be the only valid reward to yesterday afternoon's sellers.

WED afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2729.00 2718.00 ...would target 2742.00 2731.00 Bias-down: under 2708.00 2698.00 ...would target 2697.00 2686.00 Signal status: LATE NO-BIAS, TESTED BIAS-UP 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.

Consolidating the gain. Gapping up and testing 2689.00 didn't prevent trending down. Yesterday afternoon's sellers had gained traction, so this morning was likely to trend down from its open. But only the open trended down, and only briefly to 2653.50. Its reaction invalidated the bearish no-bias signal that had been triggered cleanly. Rewarding afternoon sellers for gaining traction isn't required, only likely. Preventing that reward is rare but not unusual. Gapping up above prior highs is usually how that begins, and rarely by absorbing initial weakness like Wednesday. Absorbing initial weakness requires a much stronger-handed sponsorship, which makes the bearish edge bullish by default. That explains the recovery's attack on 2722.00. Today's session is working on more than just the morning's default bullishness. Having isolated the overnight probe under yesterday's low, the downleg's origin at Tuesday's 2750.00 high should be tested. Monday's quasi-unconfirmed breakout requiring at least one more higher close is back in-play. And the bear market bounce's likely 2825.00-2827.00 objective remains in-play, too. Rejecting yesterday afternoon's sellers and then quickly rewarding this morning's buyers suggests more upside than just this morning. The fast-approaching 3-day weekend makes counter-trend price action more difficult to start. Get past this afternoon's FOMC Minutes in rally mode, and sellers would be all but marginalized.

Not all setups require being fulfilled. But their rejections require being decisive. Wednesday's gap up wasn't itself decisive enough to reject the traction gained by Tuesday afternoon's sellers. Invalidating the morning's bearish bias, isolating the overnight price, and then probing overnight highs were all much more decisive. Buyers already had earned a benefit of the doubt, and then the afternoon bias environment exit rallied even more. The Isolation setup's reward is to retrace the origin of the leg being isolated. That was Tuesday morning's high, and it was probed already by 6 ticks. The probe was late enough to still label Wednesday an "inside day." So, its gap up and relentless intraday rally forms the basis of a bullish setup gapping up Thursday above Tuesday's highs. And a bearish setup would at least prevent Thursday morning from rallying, too. Meanwhile, assuming that Tuesday's confirmation of Monday's breakout actually qualified, then at least an eventual third higher close is required. The recovery's 2825.00-2827.00 is in-play. Not exploiting the second chance to resume the rally, by trending down too sharply Thursday, wouldn't necessarily be bearish. 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.

THU morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 2769.50 2758.50 ...would target 2789.25 2778.25 Bias-down: under 2738.25 2727.25 ...would target 2717.50 2706.50 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.