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... Monday's open wasn't plunging from 2043.00, so the likely alternative was a recovery. The morning's bias-up extended through its target, triggering the afternoon's bias-up which probed its target up to 2068.50, The rally gained traction at the last two timing windows. That didn't prevent signaling a retracement back to the 2060.00 area, and meeting it into the futures close. Overnight action's new info... Narrow ranging supported by 2060.00 eventually began firming. That steepened into and out of Europe's opens, probing yesterday's high by 1 point up to 2069.50. But only briefly, as its reaction down has attacked 2060.00 to within 1 point. If, then... Was the overnight rally a harbinger of intraday follow-through, or did it fulfill the follow-through? Having gained traction, the rally need not resume immediately or aggressively Tuesday. But any post-open dip should be brief as the morning is still likely to trend to fresh highs. Gapping down under the prior afternoon's 2059.25 low (which is also the morning's bias-down signal) could invert Monday afternoon's traction. This continues to be a risk only because its a pattern established by the prior two weeks' initial recovery attempt. A lot depends on a second consecutive rally day, which would make new highs likely, and likely soon. First Trade... [Click here to view the Bias parameters] Exiting the open at 9:45 under 2058.00 would be likely to trigger the 2059.25 bias-down signal at 10:15. Exiting the open above 2065.00 would be unlikely to trigger bias-down. Exiting the open at 9:45 above 2069.25 would be likely to trigger the 2067.50 bias-up signal.

Bias-down morning points to trending afternoon. Traction gained by yesterday afternoon's rally goes unfulfilled. It wasn't even inverted, as the opening gap bounced off of the 2059.25 bias-down signal instead of extending immediately through it. Gapping down did eventually extend, quickly touching its 2053.50 bias-down target. It has been tested and retested, despite already having fulfilled it, and despite chipping away at its support. This is still a bias-down environment, but no lower low is required.

2050.50 would be a lower lower where sellers could become so stretched that price reverses back up aggressively. Its test isn't required, but it becomes likelier as the bias environment approaches without yet threatening to recover the 2059.25 bias-down signal -- it's being attacked now to within 2 ticks.

Backing-and-filling this morning is not at all inappropriate before resuming the rally this afternoon. Yesterday afternoon's unrewarded traction won't be compensated for its delay -- but it should at least prevent the backing-and-filling from extending down beyond this morning's bias environment. Otherwise, the third consecutive weekly recovery attempt will have failed.

TUE afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  2068.25 2062.25 ...would target  2071.50  2067.50 Bias-down: under  2057.25  2053.25 ...would target 2052.25  2048.25 Signal status: noN-BIAS, TESTED BIAS-DOWN 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.

Trending down through the noon hour might get push back. The morning's 2059.25 bias-down signal had quickly met its 2053.00 target. Several attempts to break lower all failed. The balance of the bias environment bounced to 2060.00 resistance. Rallying through the noon hour would have been a great opportunity to compartmentalize this morning's backing-and-filling. But the noon hour slid throughout, probing fresh lows down to 2051.25. Persistent weakness hasn't attracted much more selling pressure. The afternoon's 2053.25 bias-down signal was still being overlapped at 1:20 and 1:30 to trigger noN-bias. The bias-down target isn't in-play, and neither bias signal must define the range's extreme. Back above 2056.00 would give one more chance at an afternoon rally. An afternoon rally is critical to yesterday's session-long rally ending the three-week old decline. Otherwise, exiting the afternoon bias environment at 2:30 under 2050.50 would all but require the next upleg to originate from lower levels.

If there's anything bullish about Tuesday's decline, it's the afternoon air pocket from 2055.00 to 2038.00. Suddenly starting a one-hour slide of 17 points doesn't happen without expending a lot of selling pressure. Air pockets form from a sudden influx of sponsorship, not from the absence of counter-trend opposition. That's not the bullish part. Finally stalling at 2 ticks under Friday afternoon's 2038.50 low, a bounce resolved down to a fresh low at 2036.75. RSIs diverged positively, enabling a bounce up to 2045.00. That's not the bullish part, either.

Actually, there is nothing bullish about Tuesday afternoon's air pocket slide. Not, yet. But having expended so much selling pressure without gaining traction for the effort, the leg is vulnerable to rejection. Gapping up Wednesday to and/or through its 2055.00 origin would be bullish, targeting fresh highs for the week above 2070.00-2071.00.

Back above 2048.00 and 2050.50 overnight would help to position the open for gapping up sufficiently. Otherwise, fresh lows would target 2033.00 and 2027.00 before the next chance to reject the decline. Details and other markets coverage are discussed in the post-market Wrap recording here.

Monitor overnight Globex trading in the chaRTroom here.

WED morning signal (triggered at 10:15 ET) SPX ES Bias-up: above  2054.50 2050.50 ...would target  2060.00  2056.00 Bias-down: under  2043.50  2039.50 ...would target 2037.00  2033.00 Signal status:NO-BIAS, TESTED BIAS-DOWN 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.