If the market were certain of only limited Syrian action… then would it already be rallying out of the current range? Or, would it be waiting for a negative knee-jerk reaction to the first offensive, buying up the sell-off? I wonder if it’s either, if a favorable knee-jerk reaction to a limited attack would fatten up prices just enough to attract sellers.
Pattern points… (Setups and technicals)
Thursday was a day of second consecutives — all but the one that would have made a difference. A second consecutive morning recovery from a second consecutive pre-open dip, a second consecutive noon hour high and its second consecutive mid-afternoon slide.
A second consecutive steep downtrend into the close, with buyers failing to gain traction for a second consecutive day. A second consecutive higher close would have changed that, and would have been likely to rally into the weekend. At least sellers didn’t gain traction for a second consecutive day. But they almost did.
There isn’t much room to bounce again Friday, not if the decline were going to resume without first rallying to a significant degree. However, there is much room for selling pressure to be expended, and to still recover into the 3-day holiday weekend as its impending illiquidity squeezes shorts. Wednesday’s 3-day weekend indicator suggests that any fresh lows won’t be recovered.
What’s Next… (Outlook and opportunities)
This being a Friday, the morning’s bias is likely to persist through the noon hour. And this being a holiday weekend, don’t forget that there is no Saturday Strategy Session. Be sure to ask me in the Chartroom during market hours for any chart analyses that you need.
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.