Price action expends buying pressure ahead of week's close

Price action and setup analysis

If Wednesday night’s recovery were delayed until Thursday’s open… then would it have extended as high intraday? Probably, although not necessarily the same day. A lot of buying pressure has been expended, either to end the bounce sooner, or to gain important traction.

Pattern points… (Setups and technicals)

Marginalizing sellers Thursday morning didn’t require extending the overnight recovery. But no one told that to Thursday afternoon’s market. Room for ranging flat-to-higher up to 1621.25, instead triggered buy signals above 1618.00 and 1622.00, including the 1621.25 bias-up signal.

Only one pullback limit was violated along the way up to 1639.50, so buyers aren’t very refueled. They expended a lot of energy exiting the bias environment above the noon hour’s high and entering the final hour even higher, not to be confirmed through the 3:10-3:20 window. And the close settled back under 1638.00 resistance

None of which makes Thursday’s buyers weak hands. Not without also reversing immediately Friday back under either 1627.25 or 1621.25. Otherwise, extending higher would target 1642.25 and a test of 1648.50, probably up to 1652.25-1653.00.

What’s Next… (Outlook and opportunities)

Expiration is next Friday, so the ES front-month is rolling forward from Jun to Sep. The spread is a 6-point discount.

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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