Thursday’s narrow gain seems odd… when compared to the range’s width, and to its fluctuation from positive territory to negative and back to positive again. Expiration is vulnerable to unusual volatility when greeted like this.
Pattern points… (Setups and technicals)
Thursday afternoon’s rally didn’t accomplish anything not already done that morning. At least, not durably. The morning’s tests of 1212.00 were probed up to 1215.50, only to close back under the morning’s 1211.00 high.
Buyers gained no traction for their efforts. Not for the opening strength, since probing above it later held as described above. Not for the intraday recovery from fresh lows, which was retraced back under the recovery’s initial 1211.75 close after probing it up to 1215.50.
In the Market Wrap (linked from the sidebar) I demonstrated an “uptrending pivotal support” off the morning’s lows. It has been tested twice, most recently into the close. That second test tends to break lower, and breaking a pivotal trendline essentially leads to retracing to and through its origin. So in this case, breaking under the trendline’s prior touch at 1206.50 would target 1196.50 and 1192.50.
This being expiration, beware of unusual behavior, like extending Thursday’s recovery despite its sponsorship not gaining traction. But the Expiration Indicator still suggests a downward bias into and out of the weekend, so any strength Friday should be limited to the morning.
What’s Next… (Outlook and opportunities)
Friday morning’s bias tends to persist through the noon hour. A bias-up could extend to test 1230.00, despite its likelihood of failure from there. A bias-down could do significant damage before noon.
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.