Perhaps Thursday’s decline was… only anxiousness ahead of Friday’s Employment Situation report. Last-minute pessimism ahead of a weighty high-profile event is potentially bullish from a contrarian perspective. But only if exploited without delay.
Pattern points… (Setups and technicals)
Thursday afternoon’s bias environment was exited above the noon hour’s 1365.50 high. But the last hour’s entry was still testing the noon hour’s high as support. Its break would have been bearish.
That made trending much less likely for the balance of the day. But the reversal from the bias environment’s 1368.25 high extended down anyway. The cash session close was testing the noon hour’s 1362.25 low. Its break earlier would have been very bearish.
Support at 1364.00-1365.00 was never broken through a relevant timing window, so the only way to break lower immediately would be to gap under Thursday’s 1357.00 low. Fresh weekly lows coming out of Friday’s bias timing window would be extremely bearish.
What’s Next… (Outlook and opportunities)
Thursday morning’s 1356.00 bias-down target was not met, but its test is not required. Not requiring a test, testing it anyway at Friday’s open would suggest sellers are taking control. Meanwhile, since Thursday’s close trended down, gapping up above the afternoon bias environment’s 1368.25 high would trigger a session-long rally.
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.