Stock market price action sets up possible Monday surge

Price action and setup analysis

If Friday had recovered back into positive territory… then the close could have made Monday’s open likely to surge. Instead, that’s likely only if the rally is going to resume. It doesn’t have to.

Pattern points… (Setups and technicals)

Friday’s session developed entirely in negative territory. That’s not bearish. Not necessarily. It does keep the door open to the bearish setup Friday’s open almost triggered, opening under a prior session’s low. Friday’s opening dip was too shallow.

Friday’s last hour probed above the bias environment’s high, which could have been bullish. But the bias environment’s low was tested into the close, so the earlier buying gained no traction for its effort.

Friday’s last-minute dip ended the cash session back at 1577.75, which had been resistance, and is now support. Closing above it Thursday put into play a retest of prior highs. Closing at it failed to invalidate the setup.

Friday left these mixed signals, and more. The burden of proof remains on buyers, but the door remains open to sellers regaining control.

What’s Next… (Outlook and opportunities)

Join us this weekend for the Saturday Strategy Session. It’s a great opportunity to ask questions about the market’s bigger picture and specific setups, discuss different charting and technical analysis techniques, and request instant analysis of your own stock picks. See you Saturday morning at 9:30am ET.

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 http://IfThenSignals.com.

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