Bias-down, and then some.

Yesterday’s no-bias rally gets retraced. Look out below if it doesn’t hold.

[pay]The 1086.00 bias down signal was broken through 10:15 to signal a bias-down environment. And on a Friday morning, no less, when the bias signal’s influence tends to persist through the noon hour.

Overnight testing of the 1094.50 bias-up signal was rejected (a lot faster than I expected), and a grace period for invalidating the signal wasn’t exploited by 10:30.

By 11:00, yesterday’s no-bias rally had fulfilled its required retracement back down to yesterday afternoon’s 1081.00 bias-up signal. Lower prior highs from yesterday afternoon are also being tested as support. This all increases the potential for an obligatory bounce.

That potential for a bounce is diminished – or the potential for it to resolve in new lows is enhanced – by the bias-down environment’s 1079.25 target still outstanding, along with yesterday’s entire bounce from above 1068.00. Additionally, the bounce to 1088.00 was for refueling sellers, and they took on extra fuel by extending to 1094.50.

Recovering 1082.00-1084.00 would at least signal the downleg had ended for now. I don’t expect any bounce to be more than a correction, and new session lows this afternoon are increasingly likely.

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