Pre-close view… Down for the count.

Morning drop”s retracement doesn”t translate to afternoon recovery.

We discussed a setup during this weekend”s Saturday Review, which anticipated recovering into positive territory from an overnight or opening probe into negative territory. The probe occurred, and it was retraced back through the open. But its retracement never extended into positive territory.

Not, yet.

Tomorrow”s session isn”t being greeted from a position of weakness. After extending down 8 points, the 2071.25 opening print was recovered by 8 points, as well. And once it was recovered, it stayed recovered. Also, despite the final hour”s entry overlapping the noon hour”s low, the 3:10-3:20 timing windows did not exploit the weakness. So, sellers didn”t gain traction for their earlier effort.

But buyers didn”t gain traction, either. Extending down Monday night and trending down Tuesday is possible, which is how the decline has developed Friday and Monday. But not gaining traction Monday does require gapping down Tuesday to undermine a recovery. Not gapping down would not likely resume the decline — even if fresh lows were probed intraday.

So, as for that setup we discussed on Saturday, it remains intact since today”s sellers gained no traction. Its delay suggests that Tuesday will gap up to fulfill it. But the vulnerability to a recovery would evaporate by gapping down.