Most of the initial reaction to Friday’s… Employment Situation report was not recovered by the close, despite a late rally. There is still a path higher, but probably only if obvious immediately Monday.
Pattern points… (Setups and technicals)
Friday’s open and close both were essentially 1349.00. The 9-point rally during the session’s last 90 minutes would seem to be that much more impressive for having retraced all post-open losses. No. Closing above the opening print would have suggested as much. Simply returning to the open does not.
Stopping just short of the retest would have left an attraction above. Closing above the opening range would have put into play a higher objective. But Friday’s close was the worst of both worlds: It expended as much buying pressure as possible without gaining any traction for the effort.
At least the session avoided closing under 1346.00 which would have sealed a top. This alone keeps the door open to retesting last week’s 1369.00 (intraday) and 1375.00 (Globex) highs. But since buyers gained no traction for their late rally Friday, Monday’s open must gap up to avoid an attempt at resuming the decline.
What’s Next… (Outlook and opportunities)
REMINDER: There is no Saturday Strategy Session this weekend. We did discuss the bigger picture during Friday’s Market Wrap. Its recording is linked from the blog’s sidebar.
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.