Friday early bias signal could persist into the afternoon

Price action and setup analysis

If Thursday’s recovery attempt fulfilled its objective… then Friday’s open will attract new sponsorship for either extending the recovery, or else for resuming the downleg. And this being a Friday, the morning’s bias signal could persist well into the afternoon.

Pattern points… (Setups and technicals)

The market wants to rally. Look out above if it does. Look out below if it doesn’t.

Wednesday’s sell-off tested the 1679.25 level whose break would have triggered a daily trend reversal. That was in the morning, with plenty of time to extend lower. But the opportunity was not exploited.

Thursday’s open rejected tests of both bias-down parameters, although only the 1678.00 bias-down signal was tested post-open. The 1672.50 bias-down target had held its test overnight. But there recovery was invalidated by exiting the bias environment too low.
Finally, Thursday afternoon’s 1681.75 bias-up signal triggered. But the bias environment was exited back under it.

Printing fresh highs during Thursday afternoon’s bias environment did leave unfinished business above at its 1687.00 bias-up target. Then a 6-1/2 point rally into the close fulfilled it to within 2-3 ticks. The market wants to rally. But one way or another, it keeps undermining its efforts.

What’s Next… (Outlook and opportunities)

Thursday’s close was still testing its 1684.25-1685.00 noon hour and afternoon bias environment highs. They weren’t rejected, so the session’s trending can extend without delay, and extending the rally without delay on a Friday could marginalize sellers. But not closing above those prior highs now requires the rally to extend higher without delay, or else buyers may be marginalized for the day, instead.

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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