Market Wrap (recording & summary)

Duplicating Thursday’s plunge on Friday would have confirmed the pattern I warned of in the morning’s Market Tour. That is a lopsided Head & Shoulders, its asymmetry due to the right side developing much faster than the left.

Simply extending Thursday’s drop through Friday’s close would have been bearish, as well. But for a different reason — another attempt at confirming a trend change, after Thursday’s attempt had been absorbed.

One day does not a pattern make, let alone an exception. Thursday’s sessions have learned that lesson, since neither of the two bearish patterns was confirmed on Friday.

Often, failed bearish behavior has a bullish consequence. Had Friday not been an inside day and first probed fresh lows, then much higher objectives would have become targeted. Instead, upside potential to 2484.00 and 2490.00 remains intact. None of which need develop immediately on Monday. Only gapping down sharply Monday could overcome that.

Meanwhile, Friday’s intraday rally reached an important target after the N. Korea missile missed its. that was 2470.50, whose recovery would have left no excuse to further delay extending to fresh highs. Instead, Friday’s close was similar to Thursday’s late test of “higher prior lows” that resulted in an overnight retracement. Gapping up sharply is needed to overcome another intraday pullback.

Details and other markets coverage are discussed in the post-market Wrap recording here.

Join us for this weekend’s Saturday Review at 9:30am ET. We’ll review the bigger picture, and do instant chart analysis of your requests. The link will be emailed early in the morning.