Stock sellers come up short. Are buyers in control?

Several key attractions below were all met… during Thursday morning’s test of 1260.00. And held. Wednesday’s low, the overnight low, and last week’s lower prior highs. Then sellers were undermined by recovering 1264.75 through 10:15. “Mission Accomplished.” But what did buyers do with path open to them?

Pattern points… (Setups and technicals)

I initially underestimated the significance of recovering 1264.75, which undermined the drop’s momentum.It took the balance of the morning’s bias environment before the market figured it out, too. A last-minute surge recovered to test the 1269.75 bias-down signal at 11:30.

1269.75 was still being tested at noon. That’s not so interesting, except that the recovery extended higher anyway. It originated too late to be sponsored by strong hands. And its buying pressure at 1277.00 was met and held.

Extending higher without first correcting would only compound the problem. A correction could be completed by revisiting 1269.75 as support, or by probing below it and recovering. But extending higher first would be make the eventual retest of 1269.75 likely to break lower.

Meanwhile, some potential remains for fulfilling the session-long decline setup, which failed to produce a new low under 1260.00 during Thursday’s last hour. Exiting the morning’s bias environment above the 1269.75 bias-down signal could have negated it, but it was still being tested. Closing above 1269.75 could have negated it, but not after fulfilling buying pressure above it at 1277.00, without then closing above 1277.00. Immediately probing under Thursday’s low Friday would fulfill the setup, and compensate for the delay by trending down.

What’s Next… (Outlook and opportunities)

Friday’s Employment Situation report may produce a fresh high that trends up, regardless of any unfinished business below. That would account for the afternoon’s hesitation. But an overnight test of Tuesday’s 1280.00 high would become vulnerable to reversing down into and out of the news instead.

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.

About the Author
Rod David

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.

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