If the current rally is only temporary… then it should not have closed above Tuesday and Wednesday’s highs. Probing intraday would have been allowable, if reversed before the close. Perhaps it was a function of weather inhibiting participation, and Friday’s open will reject it by proxy. Otherwise, new highs are likely.
Pattern points… (Setups and technicals)
Thursday’s rally was not arbitrary. It was the reaction to gapping down to test targets of Wednesday’s distributive patterns. Then, it was the consequence to recovering soon enough from probing under the morning’s bias-down parameters. Ultimately, it was the momentum of being an object in motion without encountering an equal and opposing sponsorship.
They were snowed in.
Closing above 1818.00-1819.00 goes beyond the highest calculation for correcting the largest downleg. So, the rally hasn’t been only a correction, and new highs would be likely. That wouldn’t require trending straight up, but pullbacks would be considered the correction.
A second consecutive higher close Friday must confirm. Meanwhile, there is time for sellers to retake control, and to prove that closing above 1818.00-1819.00 was based on unusual circumstances. But now at least the last relative low under 1812.00 must be rejected, and preferably Thursday’s 1803.00 low.
What’s Next… (Outlook and opportunities)
Thursday afternoon’s 1827.75 was met within 3 ticks, which qualifies as fulfilling it. But it remains attractive so long as price is within its orbit. And Thursday’s close was still within its orbit, holding the first reaction down as support. Opening in this range would be vulnerable to extending higher.
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.