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UPDATE Sun 2/1 3:50pm ET -- TRANSCRIPT ADDED BELOW.

Another weekly session greeted by the market having crawled out onto a precipice. So, there is 50% more to consider. So, we take 50% more time to discuss it. That's 35 minutes of reviewing the bigger picture and another 25 minutes of Q&A.

Then we looked at the following stocks on-demand:

AAPL,MS, GDX, CY, ABX, AFL, XME, GS, CS, NEM, KING, PBR, AMZN, GOOG, (Crude Oil), RIG, RY, SU .

The bigger picture transcript will be added Sunday. Copied below is the chat posts by attendees. 

David B: good morning

c d: hi wrld

Mark Glezer: gm

M K: hahah nice reference

M K: isn't this what distribution looks like?

M K: you see that BofA ML report saying private client allocation to equities at highs above 2007

Mark : two consecutive closes under 1970 would indicate a trend reversal?

M K: you're making me want to lift some of my hedges

Bill G: A break lower could resolve like the Apr low , and not confirm a trend change and turn up?

M K: I just find it hard to believe that with all these V bottoms this probably isnt' a low as it differes so wildly with previous price action pver the last 3 years

M K: so 2020 is still the level

M K: Greek politicians are notorious for hard words and soft action. So wouldn't surprise me to see them take another bailout

M K: re:Distribution just identifying that any new trending would wind up being new sponsorship no?

M K: and we get my 2250 target

Mark : Are Mon bias-up parameters wrong - target is only 2.5 points above the signal while bias-down range seems normal?

M K: good point about the V tops

M K: Exactly

M K: previous trend cahnge signals

M K: have been fulfilled

M K: and then reversed

Mark : ok

M K: i'm not going to change my tune until that stops happening

M K: I know

M K: Its still a bull market...

M K: i gotta bail so no stocks for me

M K: wow dow loks like a sweet rollowver

M K: that most tops look like

M K: its called gold

M K: =)

Bill G: A few yrs ago Jason from SentimentTrader did a study on the oorder of the sequence of tops(dow,spx ndx) but found each to have the same chance of making a high first etc

Mark Glezer: breaking this range lower first would likely be false & rally to new highs or not necessarily?

Bill G: prob not

Mark Glezer: AAPL, MS, GS, CS

tamara : would this qualify for the 3rd time not so charming situatiom

David B: GDX,CY

David B: NEM

tamara : ABX, AFL, KIN, PBR

tamara : KING not KIN

David B: what about that gap does it had to be filled? CY

Bill G: XME, a one day sign of life on fri ?

Bill G: ok

David B: is amzn like nflx after earnings that has more room to the upside?

David B: what about GOOG. are they similiar reactions?

tamara : Could you review oil please

tamara : RIG

tamara : Thanks Rod

Mark : thx much

TRANSCRIPT OF BIGGER PICTURE:

So, this is interesting as always and a lot more pivotal than we're used to seeing on any given weekend, but we are ending weeks at extremes, and that's an interesting observation. I don't have anything in my methodology that makes any use of that, but we do want to notice it. Here we are ending the week at the lower end of a range. Excuse my levels here, but this is Friday's close. By the way, here's Thursday's low a couple weeks earlier and a week earlier than that. This is a pretty critical area, I'm going to guess, just by the number of visits there, let alone the velocity with which it is attacked, rejected, and returned to.

Now this isn't the complete picture until we look at or include blowbacks as well, because we're about to see how right here there actually was probing below this constantly tested and rejected level that despite being constantly rejected is not exactly getting out to new highs. Let's do that. Of course we're using up more real estate onscreen, so we don't see as far back, but we do include and we can see that level that's been tested, rested, double secret re-retested, and the Globex that go up overnight and price action that developed below it. We knew back then that this area would have to be retested no matter what it produced to what degree for what duration.

Because of how this area developed, certain characteristics of it told us there wasn't the requisite general broad based enthusiasm to reject anarrower weak-handed selling effort, that this area could forever be ignored on the way to higher and higher highs. So, the rally that did ensue was tremendous. I had three different areas, basically, for what we would know then to be a corrective bounce. It had to be corrected because it was only going to be temporary since reverse engineering this. Remember, we had to come back to retest that prior low, that overnight low. Those three areas were essentially the 2022-2023 area, the 2040- 41, 44 area, and then 2059, and each of those areas were met, and each of those areas was influential, but none of those areas actually reversed the trend back down. The reactions didn't develop either during relevant timing windows or didn't break back under relevant levels during relevant timing levels, and so we had enough of a reversal and/or the correct duration to the right timing window. Higher highs didn't dip out remaining in play actually potential to those higher highs and made outstanding, and we got there. The highest calculable corrective bounce target was 2059, and as we got there we were able to fine tune that to note that there was room for noise around it up to 2061.50. That's a lot of noise, and that's a bit of a thorn in our side despite getting to the highest corrective bounce target than something priced right back down to and potentially through that unstable base.

We still have some business outstanding, some unfinished business above. On the way down it's nominal. There was a Friday morning biased up signal at 2160.50 that Friday morning's. This is not the week that just ended but the one prior. That Friday morning's initial selling of the 2059 target that was met Thursday tested and held test through the timing windows necessary that is held test to the biased down signal to put into play test of the biased up signal. The biased up signal is never retested intraday, and it wasn't rejected. There was opportunity to reject it, opportunity to establish that sellers were at such strong hands that even though the open sellers were absorbed that the offsetting test could be abandoned, but that's left outstanding. That's kind of been a thorn in the side for considering whether this reaction down is really going to leave that outstanding, which has happened. It's not a first time. Substantial moves have developed with this kind of loose end, so there's that. That's one point in the bigger scheme of things.

Another point in the bigger scheme of things is we discussed last week during the Saturday review - Actually, let me just get rid of the past weeks price action. We'll go back in time. The last week's Saturday review dealt with this pattern, and at this point this channel can break either way if the 20, 59 isn't rejected then by definition it's being exceeding, and if it were exceeded at all, since that was the highest corrective bounce potential, anything higher on a closing basis would have put into play new highs. We knew based on this channel that if it were to break higher that the test of new highs would have to be very abrupt FS. Sudden, steep, and substantial but would fail. The premise was that if that were to develop it would a durable top, not immediate, overnight, or intraweek even, but we would be working our way back down so that this bigger topping pattern could retrace.

What does it mean that one week out that rather than extending higher we retraced down? We also discussed last week that if this were not to extend higher immediately that we would be dipping back down here between 20 and then having the potential to have another go of it and still didn't get that done. What does that mean? Does that mean that this is off the table now, and does it mean that this is just a bigger trading range and this is all it intends to do for awhile longer, or does it mean that that eventual reaction down, maybe not from up here, is already underway? All of the above. This is not off the table. That's the last thing we're going to discuss in a few minutes, how new highs are not off the table. Until there is a trend change the prevailing trend remains intact. The prevailing trend is up. It's been sideways for awhile, but there's a higher, there's the next market high ever, there's the interim low, and until that breaks lower, let alone is confirmed in the second consecutive sessions, this is what we can be most assured of - that this is hesitating the uptrend. That's number three. We're going to come back to that.

Is it possible that this sideways action is just going to extend? Of course that's possible. I don't really project trading ranges. I have addressed that with this particular pattern because it's so wide it does allow so much trending. The market likes to trend, and trending ranges don't happen for an extended period of time in narrow ranges, but when there is such a wide range trending can be satisfied without actually resuming the prevailing trend or reversing it. Can this extend? Yeah, I think anybody who looks at zerohedge, at least that was the aggregator that I saw this on. I don't recall if it was their proprietary stuff or something else's that they're reprinting, but I'm sure a lot of it is the same. The correlation between the current trading range that is on the chart right now and the end of QE3. This has just been one big trending process, and so when QE4 comes out, I guess, or all the QEs around the globe reach the bottoms of their wells perhaps we are in a big massive trading range. I do want to segue into that regular point of whether we're going to print the fresh highs first and then react down into a new down leg or whether that's just going to void it all together in a new down leg, trade reversal is getting ready to form. Just to go back again, remember we had a lot of distribution here at the highs. There was, you can tell, at this high back in December that we got twice at the highs into the end of December, clearly distributor patterns. The slope was shallow on the fresh highs, and yet we had a session and then another that developed exclusively above all prior trend highs without itself gaining traction based on the intraday timing techniques that we use here to identify whether its sponsorship is getting traction. They're just accidents waiting to happen, and that's a reflection of bigger money taking advantage of momentum to move its massive quantities out of the market without triggering these. This is the product of bigger money no longer waiting for the momentum or having waited too long, basically. So yeah, this is little scales and bigger topping action, but that's already been fulfilled.

Here's the daily chart. This is ES futures front month contract daily. Each bar is a day, so what we've been looking at has basically been this prior high and its higher high and Decembers initial drop, second drop, and here's January's low. So, on a bigger scale we've been really doing nothing for awhile. This is August's high. Every single leg has overlapped August's high, so this market has not made any appreciable gain, and that's not to say, "look there's a prior high, and it tends to trend through it, but it's failing." There's a prior high, and that's distributive. Probes above it, higher highs above it are being rejected, but it's not yet a sell signal because the higher highs above it haven't yet reversed the trend. From longer term trend perspective this hasn't yet reversed the trend. It's got to have a trigger, so this can be distributive but then fulfilled.

Remember the bigger ranges allow trending, which the market wants to do even though estimates range from 60% to 80% of the time, even ball parking that, 60% to 80% of the time, if not more, the market is just consolidating. For the balance of the times 60% is way too low, 10% to 20% of the time the market trends, actual trending. So, this is one big range, but it's able to satiate the market participants collective appetite for trending without actually moving. When this breaks she's going to be a big one, but the more consolidation and overlapping there is, the longer that a narrowing range is extended through time the likelier that its first break is false because of just this reason. So much trending is already satisfied that when there's a breakout there's actually not that much left to do. That maintains two things. Number 1, the potential to breakout higher and number 2, the likelier that a break higher is just a false break that stretches the rubber band so that it snaps back down. Does that cut both ways? It sure does. That pattern can break out in either direction and potentially be false.

The one reason why a false break isn't likely to the downside is because there's another pattern in here. The other pattern in here is a complex pattern. Complex meaning that rather than beginning with a trend extreme it begins after the trend extreme is retraced, and that's not the way a pattern should begin to be drawn. The pattern typically should begin at a trend extreme, so that price point is the earliest of it, and we could and would do that if this high were a little bit higher. If that high had been higher we would be looking at a descending triangle, right? A descending triangle is not necessarily bullish or bearish depending on the initial break and some other indications, but the point is that's a different pattern. Also, had this high had been lower recently, that too would have formed a descending triangle. That's fine. Either one of those descending triangles is perfectly valid. Instead, these last two highs have been level forming a channel under the prior high. That's the complexity to it. That's why I call it complex. The complexity to it also says that in the direction of this trend if the complex pattern breaksin that trends direction, whether it's a triangle, a channel, heads and shoulders sometimes appear here, that it is very abruptly met and very abruptly rejected at least to the lower end of it and usually in a trend change. That doesn't apply to breaking with the trend reversal's direction. So because this last high was even with the prior high breaking lower is not necessarily temporary.

Even though Friday's late momentum was pretty aggressive and last week's momentum was pretty aggressive, there is a possibility that sellers are done down here, that we don't immediately extend down and resume the decline. That's a function of not anything internally Friday. Friday was its own pattern. Certainly it's interesting that the high and low came at the very end of the day. It's more interesting that they came at the very end of a Friday. This last 60 to 90 minute window on Friday is usually the most narrow of the week and/or least predictable. Why? Because everybody's gone. More so, everyone who is still around the trade at 2:30 is there for the duration, so that's why you can get action late on Friday, but between the open and the morning and that late afternoon, people's schedules are unpredictably staggered. A lot of participation is leaving early for the weekend. So, the predictability of the trending is difficult to get going, but to have an outside timing window compared to any other timing window, let alone the rest of the day on Friday afternoon, is unusual.

Let's look at something else about Friday. It's pretty substantial news, but compared to Thursday's range it's an inside day. It's an inside day in a downtrend. Remember, we're downtrending throughout the week. It's an inside day that is bearish. It gaps down. It spends the entire session in negative territory, albeit filling the gap of Thursday's cash session close equivalent. There was natural resistance there and natural traction as well. So, we've got that downward biased sentiment. It is bearish. It is pessimistic gapping down from not clearly positive territory, and then from ultimately trending down through the day. Ignore that. Ignore anything else. It downtrends through the day. That's the downward biased, that pessimism in an inside day at the following multiple consecutive downward trending sessions. Usually, I would look at that and say, "Buy." I would buy it here. We certainly want to identify parameters and setups to actually trigger the long entry. That long entry could be triggered from reacting up sufficiently through the next open. It could be triggered by gapping down or probing something and rejecting it to a certain degree. It doesn't mean the end of lower prices. It just means the end of the trend. Inside day, downward, pessimistic sentiments in a number of different observations the gap is in exclusively negative territory and downward trending.

Back to the bigger picture. One other thing in the bigger picture that happens to be potentially bullish. This is Friday's session, Friday's low, Friday's lows stopping optimistically short testing the prior days low, but that prior day's low did test prior lows and is hesitating the break. A break lower is all but assured, but there's been some congestion overlap, mass, gravitational pull created here. So, that's going to make it difficult to break over, at least on the first go. On any other day I'd be looking at that setup, not a Friday necessarily, but any other day I'd be looking at this setup and be preparing for some sort of extreme or at least identifying levels to be quick to reverse back up if we're going to play a break lower because rejecting the break lower is going to be substantial to the upside. In fact, we even had a pivot reversal on Thursday. A pivot reversal being defined as multiple downtrending sessions. So, you've got a new trend extreme close that was Wednesday, gap up, close above the open high, and in the interim try probing new trend extremes but reject it. Whether it's to this degree or this degree is irrelevant. That's a pivot reversal. So, we've got some bullish accumulative action, end of decline action at the low.

Putting it all together, if it weren't for that being a Friday I would say definitively that Thursday's pivot reversal was rejected. Thursday's bullish action didn't immediately fulfill but was not entirely rejected. Until that low is taken out through the close, just like at Decembers high with two consecutive sell signals at higher and higher highs. That the first one wasn't immediately fulfilled didn't mean the second one wasn't going to appear and be fulfilled. Here's a bullish signal. It wasn't immediately fulfilled. It doesn't mean a second one won't soon develop and be fulfilled. Had Friday closed under Thursday's low we would not be looking for this bullish signal to every be joined by another, not in this range, but that's a Friday. So, can we trust Friday's price action? Can we trust Friday neither fulfilling Thursday's bullish pattern or rejecting it outright? Can we trust Friday's inside day with downward pessimistic sentiment as being predictive In this case, predictive that these sellers are weak-handed and that theirjust getting all the selling pressure, all of the kitchen sinks out of the way, and still not gaining any traction for their efforts and still not rejecting Thursday's bullish setup? It's all happening in this area of prior lows. Prior lows well-worn, well chipped away because of the Globex pattern. We didn't really flush that out and wont, but because the Globex pattern wasn't rejected precisely nor within minutes of when it needed to be to prove that it was being absorbed by strong hands, and in fact we've proved that to be the case by revisiting it, because it's all happening here and each of these tests have quickly recovered do we really want to get a bearish as possible and willing to be short on the potential that this is going to break lower because these lows do have to probe lower eventually?

We have rejected a piece of unfinished business up here, and we do have a bigger distributive pattern, but I want to be sure it's understood that we're going to be switching to bullish or be bullish just as quickly as possible if the market gives us that signal whether it be by gapping up above a relevant level, how relevant. We'll do that in just a moment when we talk about setups for the Sunday night and Monday's open. Whether Friday's last downleg is rejected to a minimum degree or literally the entirety of that is retraced immediately, whether there's a fresh low first that doesn't maintain through the timing window, or the morning's biased environment is spent in negative territory exclusively, and then coming out of it, etc., there are a number of different ways that we are certainly going to be keeping the door open to getting bullish, to getting long, because there's a lot of upside. Not just a temporary corrective bounce you have to sit through. Don't be short during it, because even if you see the open gapping up 30 points or more it's not like, "Okay we're heading to the next resistance." It's like, "We're headed to new highs." We want to play that dependent. That's getting into an area that's not in my field, what can cause that. We did see a trial movement basically floated coming out of the morning's biased environment before noon. Across the tape, Germany was in favor of giving Greece or endorsing, I don't know the details. What was it 20 billion? Which is about face for a pretty vocal critic that was keeping the door open to address Greece leaving the European Union, which I'm pretty sure everybody is pretty confident would not be good. It's not a buy on that news, and it's not the only threat to resuming the rally, but it is one and a big one. That seemed to neutralize it, and the market reacted to it. It reacted to it, thought about it, reacted to it again, and then rejected it by the way. This leg was totally going to be undone. We knew that. Whether it was Friday or later, this was going to be done because of this versus this. So we knew that was going to happen whether it was Friday or later. If that's not bullish, that the market is getting its downside out of the way as quickly as possible instead of letting it fester and attract new sponsorship, then there must be something bigger and bearish coming.

So what could cause a gap up above Friday's high having trended down into the close, gapping up above the biased environments high would trigger a session long rally? What could cause that would be actual news that triggered this, not a trial run but actual developments along those lines. Don't think it's not possible for an environment to do this. We're in an environment that can do this. So that's the only upside risk that I see, and if there's any tipping away at the lows it gets every benefit of the doubt for being able to extend down. We will still be on guard for the first timing window that probes lower, rejecting that, and so long as a timing window is exited probing fresh lows and confirmed we will be looking for confirmation from a second timing window. That's it. It's not like we're going to be waiting days and weeks for lower and lower lows before finally saying, "1000 points lower. Yeah, it's a break." We'll know pretty quickly, but during that period when the break is fresh we will need to be on guard for a fresh breakout being so fresh and having the least amount of sponsorship already in an extended trend that is going to be more easily rebutted.