How Wednesday price action sets up Friday opportunity

Price action and setup analysis

If Thanksgiving’s volume constraints persist Friday… then will its shortened session have a different pattern than Wednesday? Probably, although Globex action on Thursday might make some difference. But as of Wednesday’s close, there is attraction above and no resistance. Probing above it, or reacting down from it, could trend in that direction through the early close.

Pattern points… (Setups and technicals)

1806.50 resistance has been chipped away every day this week. Wednesday’s opening surge probed it, the morning ranged around it, and it was recovered into close after dipping intraday to 1801.25. At least an obligatory probe above 1806.50 is likely.

One or two attractions above want to facilitate that obligatory probe. Wednesday morning’s 1807.50 overbought RSIs qualifies as one attraction, barely, being the product of an errant tick that was otherwise recovered. Sunday night’s 1809.25 Globex trend extreme has yet to be tested intraday, which is almost historically mandated.

Bouncing exclusively between support and resistance is possible Friday like Wednesday’s session. But it’s not the most probable — not if the attraction above is retested. At that point, the week’s congestion below would be more attractive, and thin participation would inhibit extending further above it.

Breaking lower is possible, too. But gapping down in a thinly traded environment would likely be only temporary, regardless of there being unfinished business above.

What’s Next… (Outlook and opportunities)

The Chartroom is open during Thanksgiving’s Globex trading. Friday closes early at 1:15pm ET. There is no Saturday Strategy Session this weekend, so be sure to request chart analyses intraday.

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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