Stock price trend direction unclear, but volatility likely

Price action and setup analysis

Stock index, chart, technical analysis Stock index, chart, technical analysis

If AAPL’s earnings inhibited Thursday afternoon from extending the decline… then having them in our rear view mirror should allow the decline to extend, right? That, or produce enough of a rally to justify not extending the decline, at all.

Pattern points… (Setups and technicals)

Like moths to a flame, Wednesday night’s rally retraced Tuesday’s test of 1402.00 back up to the range’s 1412.50-1414.50 highs. These were bigger moths, but it had become a bigger flame. Thursday morning fell back to and through 1402.00 to 1399.50.

Having probed under 1400.00 in a second leg that followed a bounce from the 1405.50 area, the pullback from 1468.00 has no lower objectives. No lower objectives, that is, if the pullback has ended. Otherwise, this week’s consolidation — not bottoming — will resolve down into the weekend to resume the decline.

Keeping alive the decline’s momentum is several attractions below. Among them, oversold RSIs at Thursday’s 1399.50 low that all but require a retest, and distributive patterns targeting 1397.00-1397.75. Closing any lower would essentially target 1348.00, for starters.

Meanwhile, since there has been an intraday probe under 1400.00, an overnight probe under 1400.00 can already be in recovery mode by Friday’s open — especially so long as there is no complexity to the probing under prior lows.

What’s Next… (Outlook and opportunities)

This being a Friday, the morning’s bias signal is likely to persist through the noon hour. This being fresh lows, a bias-down could be very productive, and very damaging before the weekend. While gapping up enough could avoid probing fresh lows, keep in mind that rallying too little at the open could simply retest the range’s highs — unless overnight lows have fulfilled unfinished business below.

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

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