What now for equities?

Thursday’s drop extended through every timing window, compensating for the prior day’s session-long decline that had not. A late probe of fresh lows was recovered into the position-squaring window, as was the low it retested through the 3:10 to 3:20 timing window. Sellers were prevented from gaining traction, despite the extensive selling pressure expended.

Yesterday’s late seven-point rally to 1925.00 was retraced initially to 1920.00 — that was Thursday afternoon’s bias-down target, and testing it had reacted up temporarily. It launched another seven-point rally overnight to test 1926.50, which had been yesterday morning’s objective. That reaction proved temporary too, and now 1920.00 again finds itself trying to support another dip. Its retest touched this morning’s 1919.00 bias-down target and reacted up 3 points.

Reversing back into negative territory from the fresh high overnight doesn’t yet dismiss the open’s ability to rally. Even probing fresh lows could prove irrelevant if recovered through the open. Regardless, the alternative to rallying out of the open is to resume yesterday’s decline and extend it into Monday morning. No particular slope or pace would be likely, though extending an aggressive Thursday decline is often equally aggressive.

Exiting the open at 9:45 back above 1926.50 would be likely to at least test the 1928.50 bias-up signal, and also likely to trigger it at 10:15 because an opening drop would have been avoided. Similarly, exiting the open under 1920.00 would be likely to trigger the 1919.00 bias-down target.

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 http://IfThenSignals.com.

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