Market's Friday price action stops short of big sell signal

Price action and setup analysis

If Friday’s close had dipped back under a prior high… then it could have been a compelling hold-short through the weekend. Holding a test of the highest bounce potential at the last-minute high made it interesting. Just not reliable enough.

Pattern points… (Setups and technicals)

Wednesday’s trend change signal was confirmed Thursday by the narrowest margin. Only Monday’s prior low close held as resistance through the close, but not Monday’s intraday low. That still qualified, while expending all available buying pressure without gaining any traction for the effort.

Sound familiar?

Trending straight up from Friday’s open would have been bullish but for one problem — it all took place in negative territory. All of that buying pressure was expended without gaining any traction for the effort.

Same likely resolution, yes. But the bigger point is that the same behavior means Friday’s post-open rally had the same sponsorship as Thursday’s ranging. And that sponsorship just satisfied a lot of buying pressure by testing and holding the intraday 1548.50-1549.00 corrective bounce target.

What’s Next… (Outlook and opportunities)

This weekend’s Saturday Strategy Session begins a half-hour early at 9:00am ET, and will not last longer than an hour. We’ll look more closely at this week’s trend change signal, and where Friday’s price action fits into it, then how that affects Sunday night and Monday’s opens. We’ll also review instant chart analysis requests with any remaining time.

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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