Stocks hold resistance, setting up potential rebound

Setups and technicals

Stock index chart Stock index chart

Did it, or didn’t it… That was the context for Monday’s session. Last week ended while testing Apr 4-5 highs at 1396.25-1397.50. Immediately resuming the rally or reversing down would be likely to extend in that direction. Gapping open at or under 1396.25 and extending down to 1389.75 suggests that resistance held. It can still be invalidated…

Pattern points… (Setups and technicals)

Monday morning’s 1390.25 bias-down target was finally fulfilled when the afternoon’s bias environment started lapsing after 2:30. Its test reacted back up into the narrow 1391.25-1393.50 range. The session’s last hour was entered back above the range’s 1391.25 lows.

That was too low and too late to reject the session’s fresh lows. It was not too late to extend higher.

The fresh lows would have been rejected by entering the last hour above 1392.50, or at least recovering it through 3:10-3:20. It wasn’t recovered until the position-squaring window was beginning. The recovery’s sponsorship was suspect.

Regardless of any earlier timing in recovering any lower levels, closing above 1494.50 would have at least robbed the decline of its traction. It was touched to within 1 tick before the cash session close dipped to 1392.50.

What’s Next… (Outlook and opportunities)

Recovering 1396.50 immediately through Tuesday’s open would dismiss the lateness of Monday’s bounce. Opening any lower would likely resume Monday’s decline.

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.

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

comments powered by Disqus
Check out Futures Magazine - Polls on LockerDome on LockerDome