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 night's drop to 1981.00 was partially recovered up to 1994.00 before Tuesday's open. Tuesday's opening drop to 1977.50 was recovered to 1993.00 into the afternoon. Tuesday afternoon's drop retested the morning's low down to 1976.00, too late to recover. No downleg was so aggressive that it could be considered as reversing the trend down. Overnight action's new info... Tuesday's last drop had firmed to 1983.00 into the close. Consolidating there through midnight eventually broke higher to 1986.00. After retracing the breakout to retest the consolidation range, its recovery has tested 1991.50, and retested it while RSIs diverge negatively. If, then... The topping template all but requires the trend reversal to be obvious no later than Wednesday morning. Retracing yesterday afternoon's drop from 1993.00 doesn't necessarily contradict the topping template -- until the entire drop is recovered pre-open. Gapping up above the downleg's 1993.00 origin could form a "session-long rally," and its timing would prevent trending down this morning. Rejecting the gap up through the open would maintain the topping template, and its likely morning decline. First Trade... Exiting the open at 9:45 above 1988.00 would be likely to trigger the 1986.00 bias-up signal at 10:15. Exiting the open above 1994.50 would be likely also to renew the bias-up signal by exceeding its 1993.25 bias-up target through 10:15. Exiting the open back under 1984.25 would be unlikely to trigger bias-up.

Pre-open slide extends through the open, and then not. Reacting down from the 1994.00 overnight high greeted the open at 1987.50. Extending down choppily post-open tested 1982.00. That fully retraced to where the overnight consolidation had first broken higher. This morning's 1986.00 bias-up signal failed to trigger. A blip-up attacked it to within 1 tick at 10:15, but it wasn't touched. A bigger blip-up overlapped it at 10:30, but that was retraced. An offsetting test of the 1977.00 bias-down signal is in-play. Meanwhile, a jump in Crude Oil triggered a bigger surge to 1991.00. That's above the bias-up signal during a no-bias environment. It is "no-bias trending" that is doomed to failure. And it potentially stretches the rubber band for a more substantial drop. A more substantial drop remains in-play with the topping template, whose timing suggests a much deeper and steeper drop this morning. Not declining would not be optimal, but only rallying can invalidate the vulnerability to extending down further.

WED afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above  1994.75 1993.25 ...would target  2001.75  2000.25 Bias-down: under  1985.50  1984.00 ...would target 1979.25  1977.75 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.

Morning plunge remains contained within prior range. Plunging from 1988.00 down to 1978.00 in 5-7 minutes was the character of price action expected from the topping template. That happened this morning after the EIA report on Crude Oil triggered a knee-jerk reaction up to 1991.00. Another characteristic of topping? Extending down. That did not happen this morning. Like the bounce above 1986.00 to 1991.00, the reaction down to 1978.00 was contained entirely within yesterday's late-afternoon range. But there's nothing inherently bullish about that. Strong-handed buyers would have exited the bias environment probing fresh highs. Strong-handed buyers may yet exit the noon hour probing fresh highs, but their timing wouldn't be optimal. Regardless, probing fresh highs during the noon hour would be weak-handed and doomed to failure like this morning's 5-point probe above 1986.00. Meanwhile, an offsetting test of this morning's 1977.00 bias-down signal has become "unfinished business below." It must be tested eventually. Any interim rally would be suspicious. And testing 1977.00 could resume the character of selling expected by the topping template.

NOTE: S&Ps front-month rolls forward from Mar to Jun at Thursday's open. Nothing bullish about Wednesday, despite not being carried sharply lower by the topping template. The morning's plunge stopped optimistically short of touching Tuesday's low. Multiple recovery attempts exploited as much room as possible without launching uplegs. "Unfinished business below" from the morning was left outstanding at 1967.75 (basis Jun, 1977.00 basis Mar). No traction was gained either way Wednesday. Trending immediately would require gapping open beyond Wednesday's 1969.00-1982.00 (basis Jun, 1978.00-1992.00 basis Mar) range, or else probing one end temporarily before richocheting more substantially back in the opposite direction. The bearish topping template remains intact until a rally gains traction. That might seem to allow indefinite time before resolving. But getting past mid-week without yet trending sharply does make undermine the credibility of starting later. Details and other markets coverage are discussed in the post-market Wrap recording here.

Monitor overnight Globex trading in the chaRTroom here.

THU morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 1992.75 1981.75 ...would target  1998.00  1987.00 Bias-down: under  1985.25 1974.25 ...would target  1979.00  1968.00 Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED 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.