More on expiration’s bias.

The direction was signaled yesterday. The path is still unfolding.

[pay]I wrote here recently about the big mistake that was made in trying to regulate away a “flash crash.” In simplest terms, trying to protect us from a crash only prevents it from ending in a flash.

Except for trying to reduce exposure to a potential trading halt, how much pre-open and post-open selling pressure today would not have been considered until later, if at all?

I say, “may have created,” because there is potential for another downdraft. And if it were to generate fears similar to this morning’s open, then it can extend down to retest last week’s lows. Last week’s lows already require a retest anyway, and expiration has a knack at exacerbating a trend attempt.

Which brings us to Wednesday’s Expiration Indicator. It triggered at yesterday’s close, and signaled a downward bias into and out of the weekend.

That speaks mostly to Friday afternoon and Monday morning. It doesn’t prevent a counter-trend bounce in the interim (like, by exiting the noon hour above 1148.00).

But that would be only counter-trend. Artificial downlegs can do real damage – this morning’s has – and there is more unfinished business below than above.

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