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

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... Monday's open immediately signaled the morning's trend would be down, by opening back under the earlier low of an overnight session that had probed the prior session's high. Bouncing into resistance at 2871.00 was reversed to test 2855.00. Coinciding with Friday morning's highs offered support to launch a bounce into the afternoon that tested 2868.00. But it failed to trigger bias-up, and the balance of the session slid again. Testing 2852.00 before the close had time to react back up above the morning's low. Overnight action's new info... Yesterday's drop resumed overnight. Flat-to-lower choppiness through the Globex open eventually collapsed sharply to 2831.00 before midnight. That area is also Thursday afternoon's last relative low, which now serves as support. Already retracing up to what is this morning's 2845.50 bias-down target -- which acts as resistance from below -- a narrowing consolidation developed into and out of Europe's opens. If, then... Monday's very late bounce was probing back above the morning's low within 3 minutes of the cash session close. So, sellers didn't gain traction for their efforts. The bounce didn't recover a prior high, so buyers didn't gain traction on the bounce. This context for last night's drop allows it to be briefer before recovering. Briefer, within the other context of yesterday's opening signal being likely to persist into this morning. Recovering further pre-open would still encounter resistance at 2848.00-2850.50 which must be recovered just to indicate that sellers still aren't gaining traction for their efforts. Otherwise, the gap back to Thursday's 2840.00-2841.00 close may be a last line of defense before this downleg becomes something more substantial. First Trade... [Click here to view the Bias parameters] Exiting the open at 9:45 under 2848.00 would be likely to trigger the 2850.75 bias-down signal at 10:15. Exiting the open under 2841.00 would be likely also not to recover the 2845.50 bias-down target by 10:15 which would renew the bias-down signal.

Has the follow-through finished? Selling resumed before the open and retested the 2831.00 overnight low down to 2828.75. Bouncing through the open overlapped 2837.50 resistance by a couple of points before reversing back under its 2836.50 sell signal. The drop soon accelerated into the setup's 2827.75 target. And soon broken. By a lot. Sawing through 2827.75 formed a Falling Wedge that resolved down aggressively again, plunging to 2818.50. That was potentially stage-3 of a 6-stage pattern that often follows (see the nearby chart). Troughing and bouncing back into the Wedge have taken the pattern to its final stage. The bounce extended back above the Wedge before pausing, increasing the potential for its reversal to gain traction throughout the day.

A scapegoat has been identified in the pre-open news of a Buffet/Bezos/Dimon health care initiative that is pressuring the rest of the sector downward. This helps market participants to discount the negative and to start re-focusing on the positive. Not immediately, but gradually and ultimately.

Back under 2827.00 (just tested by a blip-down) would start to signal the recovery is failing. And potentially that a much more substantial intraday drop is forming. Otherwise, could today's session turn positive? That's the stuff of blow-off tops, even after their first warning shot is fired. Back above 2831.75 (now being probed) would help to extend the bounce, or more.

TUE afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 2840.25 2841.00 ...would target  2845.75  2846.50 Bias-down: under  2824.75 2825.50 ...would target  2818.25  2819.00 Signal status: BIAS-DOWN FAQ NEW! Flowcharts: Bias-UP // Bias-DN 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.

Trying to reject bias-down. This morning's recovery from 2818.50 made it to 2837.00 before the bias environment began lapsing. The recovery was retraced down to 2820.50, triggering the afternoon's bias-down. But the afternoon's behavior doesn't seem to know it -- A 12-point bounce is testing 2832.00. The bounce may be only a correction. Of course, this is a very bearish chart point to be expending weak-handed buying pressure. Stretching the rubber band could snap back down very hard this afternoon, to 2805.00 and 2893.00. This afternoon's 2819.00 bias-down target is now "unfinished business below." It can remain outstanding while the bounce extends into a rally. But back under 2824.50 would start to signal the rubber band is snapping back down.

Monday's opening sell signal hadn't finished its business that morning, making it likely to extend into Tuesday morning. Which it did, trending down early overnight and extending lower before the open. Tuesday morning's low did react up substantially, but mostly only temporarily. The balance of the session ranged choppily sideways through the close, just above the morning's lows. A couple of things happened Tuesday, and a couple didn't.

What did happen is a new sentiment or pattern of gapping up into Friday's new high session and gapping down into Tuesday's retracement through that last upleg's origin. The paradigm shift is sudden and relevant, closing under support -- similar to January's two prior big down days. But what didn't happen Tuesday is the broken support being within proximity of Wednesday gapping up immediately above it to reject Tuesday's break. but too far below to be recovered immediately by a gap up tomorrow.

Tuesday's other development was the multiple downtrending sessions, also a new characteristic. This didn't happen during January's rally, which has stretched the rubber band. That rubber band didn't snap back up in the afternoon, perhaps inhibited by a stream of high-profile post-close earnings due, and/or the evening's State of the Union address, if not also the next morning's ADP employment number.

Isolating fresh lows to the overnight is the only reliable recovery pattern that would be signaled immediately. Meanwhile, overnight lower lows not recovered through the open would be vulnerable to melting down into the afternoon.

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 2829.25 2830.00 ...would target  2836.50 2837.25 Bias-down: under  2819.75 2820.50 ...would target  2813.25 2814.00 Signal status: BIAS-UP, BIAS-UP TARGET MET FAQ NEW! Flowcharts: Bias-UP // Bias-DN 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.