The most significant event on Friday was that the S&Ps stopped 1-timeframing UP on a weekly basis. The short and intermediate term trend has turned down. If there is to be a further meaningful correction, the market will auction lower to the 1600 level and top of the lower weekly balance at 1593.25. Lets look at the Daily RTH chart next:
On Friday, Price settled within a prior 4 day balance from early May. Acceptance within this balance area targets the balance low at 1618.50 which is also within 3 handles of the next weekly low shown above in the weekly chart. Below that we have a large Gap at 1605 level. Recent price action suggests that the tone has changed from buying breaks to selling every rally. Look at the excess highs made at 1685.75, 1672.75 and 1660.75. Lets looks at the Profiles next:
On Friday, the market saw an early rally as the overnight shorts covered their positions. After tagging the prominent POC from Thursday - there was no follow thru. Value was overlapping to lower and the POC did not migrate lower in proportion to the price decline that came in the afternoon - which is clearly a sign of caution. For Monday - my focus will be on the Spike - shaded area shown on chart above. The top of the Spike at 1641 is resistance. Opening within the Spike coupled with lower developing value shows acceptance and a possibility for the market auctioning lower and/or a balancing day. Trading below the Spike tells us that price has not auctioned low enough to attract buyers. Opening and trading above the Spike may trigger a short covering rally that targets the POC (also an anomaly) from Friday.
