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Through the prior close... Thursday gapped down, as had Wednesday. Thursday's post-open rally peaked sooner than had Wednesday's. Despite having been higher, it was reversed under the open's low sooner. Buyers were learning to exit sooner. The afternoon did not recover. Buyers were learning to be patient. But only one traction factor triggered. Buyers still had not been conditioned to become sellers. Overnight action's new info... Firming 5 points out of the Globex open soon surged 25 points into China's open. It never extended higher. Hovering choppily at the highs -- even through Europe's opens -- eventually did retrace all but 3 points of the gain. If, then... Last-minute sentiment before influential reports can be predictive from a contrarian perspective. So, did last night's initial 25-point surge reflect optimism, or was it actually inhibited by pessimism? A little of both. Gapping up enough could trend higher intraday. But the trend is otherwise down, and not reacting up high enough for long enough would be likely to resume the decline. First Trade... Preliminary levels aren't calculated ahead of the Employment Situation report.

Payrolls reaction retraced, but not yet reversed. The reaction up on Payrolls had attacked 1965.00 before reversing back down to 1944.00. The open's "last gasp" bounce up to 1953.00 was retraced down to 1935.50 until the 10:15 bias timing window. Rejecting tests of both the 1942.50 and 1948.00 bias-up parameters by 10:15 has put into play offsetting tests of both the 1927.25 and 1921.00 bias-down parameters. Confidence could be greater. But only because optimism keeps popping-up. Literally.

Absorbing the open's gasp up to 1953.00 was only retraced to its 1944.00 pre-open low, not reversed under it. Fresh lows were recovered to test the 1942.50 bias-up signal as resistance at 10:30, almost recovering it in time to invalidate its earlier rejection. The pre-10:15 1935.50 still isn't probed. Exiting the bias environment above prior highs can invalidate the bias signal.

The likelier scenario remains down. Continued optimism can only delay the destiny, at the cost of exacerbating its eventual effects. In that delay is potential for bouncing into the noon hour. Otherwise, fresh post-open lows -- especially if probed aggressively -- could extend down deeply into the afternoon.

FRI afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  1949.00 1941.00 ...would target  1954.25  1946.50 Bias-down: under  1935.75 1928.00 ...would target 1929.00  1921.00 Signal status: NO-BIAS, TESTED BIAS-UP 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.

Range narrowing in on unchanged. Bad choice. This morning's s drop to 1924.50 fulfilled the offsetting test of its 1927.25 bias-down signal. The offsetting test of its 1921.00 bias-down target remains outstanding. Reacting up through the bias environment's exit and into the noon hour tested the morning's 1942.50 bias-up signal. Its resistance held, as did the afternoon's 1941.00 bias-up signal. The afternoon's 1928.00 bias-down signal wasn't touched. This is a no-bias environment, and it begins lapsing at the bottom of the hour.  Not using that time for rallying away from yesterday's lows would be vulnerable to resuming the decline when the bias environment lapses. Probing only slightly into positive territory would be even more bearish, as it reflects last-minute optimism. Shallow optimism before two days of illiquidy doesn't prevent resuming the decline as the bias environment lapses.

MON morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 1928.75  1921.00 ...would target  1935.00  1927.25 Bias-down: under  1914.75 1907.00 ...would target  1907.50  1899.75 Signal status: NO-BIAS, TESTED BOTH BIAS-UP PARAMETERS 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.

Unfinished business below at 1921.00 was met. The delay was compensated by extending to 1912.00, probing it by only a couple of points when there was potential for 1907.00. Optimism? The break under prior lows to satisfy 1921.00 waited until the last half-hour. Optimism? Post-open action didn't extend higher, but it did gap up. And that was after probing substantially into positive territory overnight, greeting the Payrolls report firming, and then reacting up to the number. Optimism. Friday's late break lower originated too late to confirm that optimism is dead.  But it's an ugly close, anyway. Other than China possibly bottoming already, it's difficult to imagine Europe's opens not immediately discounting what has developed since their close. Join us for the Saturday Review to game the possible paths for Sunday night and Monday's opens. Details and other markets coverage are discussed in the post-market Wrap recording here.

Be sure to join us at either link below by 9:30am ET for this weekend’s Saturday Review. We’ll discuss the market's bigger picture, and then review any stock charts that you request.

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