If I remember correctly there was a lag...and to top it off that extended trading range that began in the spring lasted so many months that complacency set in that any move down to the bottom of the range would be defended...it was also an OpEx week (one of the few that didn't rip relentlessly higher like a week ago)...
At the same time you could argue that Friday wasn't exactly a full trading day with heavy volume, so perhaps the reaction was limited given limited participation.
Fair enough, but far too often you see a huge change in direction right at the RTH open. This to me means that different traders have different opinions (clearly). And although Euro/Asian time zone traders can trade the US session and vice versa, it seems to me that a different type of trading occurs in the RTH, given these huge changes in direction. I do agree though that previous times there was more of a reaction to Asian markets, especially during the overnight session even, but this wasn't the case on Friday. Perhaps we will see if there is a reaction on Monday.
Again, look back to the chain of events with the Chinese market...it crashed well before that August swoon in the US markets..only after a few successive yuan devaluations and Yellen going hawkish during an OpEx did the US markets sell off significantly... Realistically, it seems that external events hit the US market only during the "risk off" phase
It just doesn't look that bearish any more (to me). When it did I posted my expectation in my journal, but there was no follow through. You have to be realistic.
The downside corrections happen with much greater magnitude. I would prefer a clear breakout past the long established range, possibly for a week's duration. I don't have to trade everyday.
As far as I am concerned it's rather simple, whenever a real selloff is expected it would be evident via futures pre-open as stock holders will be hedging against a selloff, what we have seen on Friday as a reaction to China is not worrying. Let's see what happens tonight. US indexes have made it above 200 Daily SMA, DAX has made it above it last week, FTSE is below it and China too. August sell off was marked by China eventually falling through that SMA, the world followed as the rest were drifting near it.