Pre-close View

Huge morning recovery retraced by 61.8%, and shrinking.

Rallying out of the open”s spike down to 1831.00 had probed back above 1900.00 inside of 10 minutes. That was extended by 61.8% to into the noon hour”s 1950.00 highs.

I asked earlier whether that was just a head-fake, and now 1876.00 is being tested. That”s a 61.8% retracement of the recovery, which is normal. But that”s not yet a head-fake. The decline could probe under 1859.00 and still not prove it isn”t just a temporary correction.

That said, sellers did gain traction for their effort. No matter what may happen before the close, nothing will change that the bias environment was exited under the noon hour”s low and the final hour was entered under the bias environment”s low.

Their reward is to trend under this afternoon”s lows, for an entire timing window. The balance of the session need not trend down, but the head-fake keeps that door open.

Closing down sharply at fresh lows on expiration.

That about says it all. There is nothing bullish about this session. And nothing that isn”t bearish about the afternoon.

The bearish WedEX was productive, making it likely to be productive Monday morning, too. That might mean a gap up trends straight down, but the market seems more interested in opening lower.

This could be very bearish, and we”ll discuss it in greater detail during the Saturday Review.

Bias environment”s bounce is greeting the bearish WedEX.

Friday afternoon and Monday morning price action should be biased downward. So says the WedEX indicator, which triggered Wednesday, and then clarified matters on Thursday.

All opportunity to invert is gone. The possibility exists, but it is always difficult. Now, not resuming the decline would invalidate the bearish WedEX.

This could get very ugly, and there”s no reason to assume it can recover straightaway Monday.

Fresh lows into late-afternoon are creating an inflection point.

Did sellers gain traction? The bias environment exit was starting to probe under the noon hour”s 2042.75 low. The final hour was entered lower, but the 3:10-3:20 timing window didn”t extend under the 2038.50 low.

Yesterday”s price action was close enough to expiration that we could assume its influence had exacerbated the decline to some degree. Today is only closer. You would think that price has overly adjusted for tomorrow. And it may have.

But at the same time, price is becoming newly-vulnerable to falling off the precipice.

Either recent selling did get carried away in adjusting exposure for expiration, or else that selling has stretched the rubber band to its breaking point. The bearish WedEX can invert to having a bullish influence if the selling pressure it identified is already expended — and a lot of selling pressure has been expended.

September rate hike? Steep sell-off?

[Correction to Daily Spot”s Euro coverage: The next higher potential target would be 1.1220, not 1.2250]

The early release of FOMC Minutes pushed above this afternoon”s 2077.00 bias-up signal, to touch its 2082.00 target. It wasn”t in-play, but it is still resistance. Anyway, its reaction down probed back under 2077.00, and then surged to retest the 2093.25 open.

None of which changed that the rally originated during a no-bias environment. Having failed to trigger the 2077.00 bias-up signal by 1:20, 2077.00 should define the range”s upper-end. Its retest is required.

In fact, a sell signal finally triggered under 2090.25. And it has extended down to 2074.25. So, its attraction is neutralized.

And not only is that attraction neutralized, but it was neutralized pretty quickly. Almost as if the market is trying to be sure not to have any unfinished business below outstanding. Meanwhile, overbought RSIs at the 2093.50 high require a retest. And back above 2079.00 would start to signal momentum reversing up.

We”ll probably have a WedEX signal today, which will identify any bias to expect Friday afternoon and Monday morning. Be sure to attend the post-market Wrap for more on that.