Bias-down target met. But wait, there’s more!

[pay]S&Ps resumed sliding out of the cash session’s open until probing the ESu 1329’00 bias-down target by nearly 1 point. The emotional extreme that formed there was likely to be retested, although 3-min RSI wasn’t oversold to actually require the low’s retest. Nonetheless, a 3-1/2 bounce back up to overnight prior lows was retraced back the low, and lower.

A low not requiring a retest makes its eventual retest bearish. So S&Ps continued sliding to within 1 tick of 1323’00 where both 1-min and 3-min RSI did become oversold to both predict a bounce and to require the bounce to fail. A 4-point bounce should now be retraced back down to the low, where we’ll watch for signs of bottoming (e.g. positive divergences, buy setups) before the morning’s timing window closes at 10:30.

Without this being a bottom, a new downleg would be underway – steeper and deeper than the one that targeted 1337’50. And a close today back above 1342’50 would finally form a bottom. I am uncomfortable with either scenario developing today during expiration, for which there is no historical comparison to confirm, and many current influences to contradict. But we’re playing the near-term moves, for which the same parameters apply.

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