Timing key to Friday's stock market surge

Price action and setup analysis

If Friday’s late surge had begun just 10 minutes earlier… then perhaps it would have been credible for closing above relevant resistance. But that was no longer a relevant timing window, so its sponsorship was not strong hands. We’ll discuss this and individual stock requests in the Saturday Strategy Session at 9:30am ET. Hope to see you there…

Pattern points… (Setups and technicals)

Of course, that relevant resistance is 1627.25. It held again, and again and again, but ultimately didn’t. And that’s just Friday. But the afternoon’s surge originated during the position-squaring window, rendering it irrelevant. Unless…

Actually accomplishing something with the late surge could have made it relevant. Friday’s late surge did produce a new high close, sort of. Actually, its 1629.75 close was still testing Wednesday’s 1628.75 high close. Both were under Thursday’s 1632.25 intraday high. Friday’s session did not trend to a new high close.

Problems at Friday’s lows joined the problems at its highs. At least the morning’s last two dips stopped optimistically short of touching Thursday’s 1620.00 lows. And those lows had their own issues of excessive optimism. After an extended or productive decline, impatient buying can be productive and extended, too. But never durable, and neither should the excessive optimism at 1620.00-1621.00.

What’s Next… (Outlook and opportunities)

None of which is a sell signal. But half the week ranged widely around Wednesday morning’s 1627.25 high, almost closing at it. Wednesday morning’s high was scheduled to be a momentum peak. Extending higher would be bullish, at least for very near-term price. Delaying any higher highs would suggest that momentum remains peaked.

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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