Can a bias-down bounce?

An optimistic counter-trend rally is possible, but its consequences would be bearish.

[pay]The opening 15 minutes of volatility bounce to a test of the 1057.50 bias-down signal as resistance. Its recovery through 10:15 would trigger a no-bias environment. The bounce ended along with the open’s volatility, and the 10:00 econ report sent S&Ps back down to 1052. The bias-down signal was triggered at 10:15.

It’s too late for a recovery to cleanly trigger bias-up. A recovery above 1056.50-1057.50 after 10:30 would signal a bias-down rally underway, its purpose being to refuel sellers for a bigger downleg later. So, the most bullish scenario near-term is also the most bearish scenario longer-term.

Otherwise, the 1050.50 bias-down target is in-play. Regardless of whether it is met, entering the noon hour under 1052 would suggest the ranging was limited to this morning only – this afternoon would be likely to trend down.

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