If there is no bounce around 2:30 AM then this is a warning sign. Either case increases the potential for the markets to experience weakness into the close. A 2:30 AM high would be the most bearish scenario. A 2:30 AM low would likely lead to strength into around the open, however, most of the strength would be probable to appear early before the cash market session and subsequently lead to a choppy session during the day
Overall, markets are experiencing the worst internal measures of participation on any rally we have evaluated over the last year - probably many years. Moreover, bearish market structure projection may not have kicked in yet but is it unresolved and its influences are likely to increase.
The last time something similar happened was at the end of November - this led to a swift and marked decline in December that almost no one seemed to be expecting because December is bullish. However, MSP was accurate, in this case, projecting a December decline. It did project weakness a bit early towards the end of November, and this built up divergence in the market as well as surprising the bullish seasonality players who did not get their trade being forced to buy at highs made the decline in December more severe.
Additionally, we have other negative forces building...more than the horrid participation and internals mentioned earlier. Simply awful. And other influences such as the New Moon cycle shown below:
These markets, being as they are, can push higher and further increase the divergence. However, this does not resolve the negative influences that will continue to accumulate over the next four weeks. More divergence that builds the like the sharper snapback when the divergence resolves.