Bias-down target met.

[pay]The ESu 1277’50 bias-down target was probed by more than 1 point before bouncing back above prior lows. The bounce is now attacking the 1280’00 area, whose test should send S&Ps back down to the lows and lower.

Today’s second consecutive gap down is a sign that sellers are trying to take control. Extending lower without filling the gap is a sign that they’re succeeding. Within the context of being a reaction to Monday’s doomed surge to new highs, there could be substantial selling pressure working its way into the system.

The slide has already done substantial damage to the chart. Either sellers have been expended and a corrective bounce will begin, or else this afternoon will be very vulnerable to extending lower at an accelerated pace. Above 1285’00 suggests a recovery attempt, and under 1276’00 suggests further decline.

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