New highs could hinge on Ukraine hostilities -- and Russia's response

Price Action & Setup Analysis

If Russian tanks don’t roll by Friday’s open… then the weekend could be greeted at new highs. Fully recovering from Wednesday night’s plunge shouldn’t be confused with the market being immune to conflict there.

Pattern points… (Setups and technicals)

The 10-point recovery from Wednesday night’s plunge extended through Thursday’s open to confirm the market has been basing. The recovery extended up to Tuesday night’s 1852.50-1853.25 highs to chip away further at its resistance. Dipping into the bias environment’s exit retraced a healthy 61.8% of the rally from the noon hour’s lows.

All that was required of the final hour to be bullish was not to extend the pullback. Fresh session highs weren’t needed to put into play higher objectives. Overbought RSIs left outstanding at the afternoon’s high would suffice for attracting price higher. The position-squaring window’s 4-point drop back to the earlier 1848.25 buy signal wasn’t necessary.

Retesting the high’s overbought RSIs is a technical objective. No higher price objective is in-play. A retest of Monday’s 1856.50 target isn’t required. But retesting it — and exceeding it through a relevant timing window — would make 1869.00 likely to be tested, too.

If Friday’s open doesn’t exploit multiple sessions of recovering from intraday sell-offs, and being greeted at the basing’s upper-end, then fresh lows for the week under 1833.00 would be possible. In fact, having trended up into Thursday’s close, gapping down under the afternoon’s 1847.50 low would trigger a “session-long decline.”

What’s Next… (Outlook and opportunities)

Being Friday, the morning’s bias signal is likely to persist through the noon hour. Also being a Friday, a new high close would be unlikely to serve as the rally’s high. Thursday’s close was a new high, but didn’t probe Monday’s prior high — that qualification would be almost irrelevant on Fridays. Post-open econ reports might inhibit early trending in either direction, but can accelerate any trending already underway.

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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