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) Wednesday's attacked Tuesday's 3374.50 high to within 2 points on the way to probing it up to 3377.00. That was the upper-end of a narrow 8-point range that persisted into Wednesday's final hour. A very late breakout during the proxy window attacked 3381.00 through the close. Overnight action's new info... (nearby chart is last intraday session and Globex) The late break higher extended up to 3382.50 through the Globex open. Then dueling coronavirus headlines -- epicenter case surge, and San Diego's second diagnosis -- triggered a 19-point collapse to test 3364.00. Its 61.8{faed0d6dca04cec8b6b7985efddb9b0651107a3aebb05f69f0166038b8c951f6} correction up to 3373.00 was retraced entirely to greet Europe's opens back at earlier lows. Selling accelerated to probe another 15 points lower down to 3348.50. Now a bounce is consolidating back up to 3359.00. If, then... (notes to accompany the Tour recording) Yesterday I described the weak base that had formed from 4 unexploited bullish setups during the past 2 sessions. Two consecutive opens had quickly peaked for the day. All were suggesting the rally's sponsorship had become weak-handed. Still, this bearish setup was only contextual -- less a sell signal, and more a vulnerability. Probes of higher highs would be tenuous, but the rubber band could have been stretched a little further before snapping back down. Now, "surprising" coronavirus news after yesterday's close is already revealing how tenuous the market had become by triggering collapse overnight. Nothing yet changes the potential that this bearish setup's impact will be only a temporary correction, which would have been likely to test 3346.00 or 3341.00 wherever it had ultimately originated. The 3348.50 overnight low was close, but so far only Tuesday afternoon's lows are being tested as support. That's noise, not a correction. We can't forget that regardless of the past two sessions' organic bearish setups, the headline trigger is an artificial catalyst and vulnerable to recovering its origin. Meanwhile, exiting the open back under 3351.00-3352.00 would likely extend the selling through the morning, and proximity to 3346.00 or 3339.00-3341.00 would make lower lows likelier down to 3333.00. Regardless, a bigger question this afternoon will be whether today's headline reaction recovers to close back above 3361.00-3362.00. First Trade... (preliminary indications for the Bias parameters) Exiting the open at 9:45 under 3362.75 would be likely also to exceed the 3365.00 bias-down target at 10:15 to renew the bias-down signal.

And bias-down target still being tested. The overnight drop to 3348.50 was retraced pre-open to test 3364.00, the low of last night's first reaction down. Extending the retracement post-open attacked 3372.00, but suddenly collapsed back down to 3359.50. The bias-down signal was barely threatened, but the 3365.00 bias-down target held through 10:15. This is a bias-down environment, target met. Nothing prevents trending back down, but it's not required. Now another bounce has been testing 3368.00 for a half-hour. Its narrow range is supported by the 3365.00 bias-down target. Back under 3363.25 would trigger a new post-open downleg, targeting at least 3354.00. Otherwise, resolving higher out of this narrow range would be likely to test the 3373.75 bias-down signal by up to 2 points. The shallower gap down helps to confirm last night's headline reaction may have been exacerbated by the bearish context that greeted it. More time may be needed before selling pressure can run its course, but this is still probably nothing more bearish than a correction.

THU afternoon signal (triggered at 1:20 ET) SPX ES Bias-up: above 3380.50 3379.25 ...would target 3388.75 3387.50 Bias-down: under 3372.25 3371.00 ...would target 3366.25 3365.00 Signal status: 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.

Rallying anyway. This morning's recovery got to its 3375.75 target and reacted down back under its 3375.75 bias-down signal until the bias environment began lapsing. Then the bias-down environment's bias-down signal was no longer required to define the window's upper-end. Extending higher filled the gap(s) back to yesterday's 3378.25-3380.50 close. Reacting down from its natural resistance touched 3375.00 at the afternoon bias window's entry. The 3379.25 bias-up signal held its test to trigger no-bias. Triggering no-bias isn't preventing no-bias trending back up through last night's 3382.50 high. Like this morning's probe above its bias-down signal in a bias-down environment, this no-bias trending will require being retraced to its 3379.25 bias-up signal. So, new highs are being probed before a deeper correction could develop. Also testing the rally's next higher objective at 3391.00 would allow its reversal down to actually damage the rally's chart, unlike the overnight dip. Meanwhile, reacting down any earlier could refuel to exten dthe rally more durably.

"Surprise" coronavirus headlines had triggered an overnight collapse from 3382.50 to 3348.50. Although stopping short of the nearest "lower prior highs" at 3346.00, a bounce had recovered back up to 3366.00. And the first half-hour's 3359.00-3372.00 wide range resolved up to attack 3980.00 through the bias environment exit. What collapse? The afternoon's no-bias environment probed higher anyway, to new highs attacking 3385.00, despite being doomed to failure. Its required retracement was overshot, extending down to attack 3371.00 before the close bounced back up to 3377.00. The 2 consecutive sessions of 4 unexploited bullish setups didn't warn of the coronavirus headlines. But they did create a bearish environment for exacerbating the headline reactions. Whatever its catalyst, the drop neutralizes the bearish environment. Until more setups or ignored setups make the environment bearish again. Meanwhile, Thursday's second consecutive close above 3361.00-3362.00 confirms 3391.00 is in-play. Its influence could produce a new high close Friday which would entrench the rally -- especially being a 3-day weekend AND expiration. None of those setups are associated with trend extremes, and the rally's next higher objective at 3451.00 would be put into play. Avoiding a fresh high close Friday, especially if reacting down from 3391.00, would start forming another bearish environment. Friday afternoon liquidity tends to evaporate ahead of a 3-day weekend. Expiration may keep up turnover, but one-sided volume is not liquidity. An illiquid environment would likely exacerbate its reaction to another coronavirus headline, or to a newly developing story that the Fed isn't filling up the Repo bowl quite as much (now THAT'S illiquidity). 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.

FRI morning signal (triggered at 10:15 ET) SPX ES Bias-up: above 3382.75 3381.50 ...would target 3388.75 3387.50 Bias-down: under 3373.75 3372.50 ...would target 3366.75 3365.50 Signal status: LATE NO-BIAS, TESTED BIAS-DOWN SIGNAL . 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.