Bias-down met.

[pay]A corrective bounce tested ESu 1298’00 before reversing back down to new session lows, probing the 1288’00 bias-down target by nearly 1 point.

The three prior lower lows had each produced a bounce before reversing down. The first two bounces were increasingly higher, forming an Expanding Triangle. The third bounce retraced only 38.2% back into the Triangle before falling out of bed down to 1288’00. A 61.8% bounce would have indicated that optimism was still capable of fueling the decline. Instead the shallower bounce suggests that pessimism is finally prevalent.

Pessimism can be bullish from a contrarian perspective. It can also be self-perpetuating. We’ll know its the former if 1295’75-1295’50 is recovered on a closing basis. The latter alternative isn’t bullish, but that not necessarily any more bearish than what’s already in-play.

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