If a fresh high had been probed Thursday afternoon… then it would have been reversed before the close. Greeting Friday at the highs does make reversing down a little less likely — at least, if not reversing down by noon.
Pattern points… (Setups and technicals)
Thursday morning’s post-open 14-point rally suddenly met a 2-point range that lasted 3 hours. That’s not including the 90 minutes of narrow ranging since the morning’s bias environment lapsed. Obviously, anxiousness ahead of Friday’s Employment Situation report apparently paralyzed Thursday afternoon’s price action.
That was an interesting spot to suddenly become paralyzed — not at a fresh high, and not just under a prior high, but right AT prior highs. Thursday’s 1594.25 highs had been the peak to Tuesday’s late surge into the close. It was exceeded only momentarily Wednesday morning, and only by 1 point.
Surely, Wednesday’s session-long decline wasn’t recovered all the way back up to prior highs, just to attack those prior highs without actually probing fresh highs. At least, that’s often the case. It is not always the case that fresh highs are probed without first dipping, regardless of how narrowly three consecutive timing windows have ranged.
What’s Next… (Outlook and opportunities)
Fresh highs are not required, just probable. Fresh highs will also probably be reversed down hard — unless the open were to remain above prior highs. At that point on Fridays, countertrend sponsorship usually becomes marginalized for the day. The best chances for trending down into the weekend are either to quickly reject a probe of fresh highs, or else to gap down strongly.
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.