Unusual volatility into and out… of expiration was the only reliable information from Wednesday’s Expiration Indicator. After Thursday’s substantial overnight and intraday bounces, their reactions down, and the resolution well into negative territory, is it possible for any volatility to remain?
Pattern points… (Setups and technicals)
Wednesday’s Expiration Indicator was only modestly bearish, if bearish at all. Perhaps that tenuousness is why an overnight and intraday bounce to 1386.00 and 1390.00 was able to delay extending Wednesday’s decline. Despite having extended it, the Expiration Indicator remains only modestly bearish, if bearish at all.
1366.00-1367.25 became the next major objective below. The selling pressure behind the target was satisfied thoroughly down to 1365.50. But oversold 1-minute and 3-minute RSIs at the low require its retest, And its reaction up to 1374.50 is more than sufficient to have refueled sellers.
But there is no requirement to retest Thursday’s low within any time frame. And no requirement to trend down under it when retested. There is meanwhile plenty of resistance above, and a lot of volatility already expended. Expiration is being greeted from between a rock and a hard place — a suddenly dull session would not be surprising if the open wasn’t already trending aggressively.
What’s Next… (Outlook and opportunities)
This being a Friday, the morning’s bias signal tends to persist through the noon hour. Trending will be difficult to start otherwise, and difficult to stop once it gets started. These influences are only more so during expiration.