Thursday’s recovery from session lows… failed to close positive. Tempered enthusiasm, or tired buyers?
Pattern points… (Setups and technicals)
Wednesday afternoon’s reaction down from testing 1215.00 had extended down after the 1201.50 cash session close to the 1197.50 futures close. That eventually extended down to 1190.00 overnight and then to 1185.25 intraday.
That’s a lot of selling pressure to expend in reacting down from 1215.00 resistance.
All of it since Wednesday’s close was absorbed Thursday. A relatively brief 20 minutes did probe about 1 point higher than Wednesday’s 1201.50 cash session close. Thursday’s futures close recaptured 1197.50.
That’s a lot of buying pressure to expend in absorbing 1215.00’s reaction down.
An immediate rally would retrace well into Wednesday’s range to 1206.00 or 1209.00, or above Wednesday’s 1216.00 high to 1222.00, which would help to form a more durable top. Alternatively, a break under 1195.00 would target the 1191.00 area and either recover to test 1222.00, or else extend down into a bigger correction.
What’s Next… (Outlook and opportunities)
Thursday’s close was essentially unchanged, making trending difficult to start for a Friday without doing so immediately and decisively. Almost anything resembling a flat open could still trend intraday, but not without retracing entirely. And this being a Friday, the morning’s bias is likely to persist well into the noon hour.
Look for at least one update overnight or ahead of the Morning Market Tour… My thoughts on the day’s econ calendar are linked here.
Rod David develops analytical techniques that are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He primarily analyzes S&Ps, generating several round-turn candidates daily. Rod publishes "Trading Plan" and more each session at the blog http://IfThenSignals.com.
