The week started on a high note… which is how last week’s last session had opened, too. Monday also resolved down, much the same in principle, with minor distinctions. This can’t go on forever.

Pattern points… (Setups and technicals)

Last week’s last three sessions each had rejected probes above 1245.50. This sequence made it necessary for a corrective dip to refuel buyers if the rally were to advance. Rallying first would be unsustainable.

In fact, Monday’s session chose to rally first, and it was unsustainable. Its gap up to prior highs was unable to extend higher, and it was largely retraced. But not entirely. The gap up reflected optimism, as did the probe above Friday’s high and the morning’s high, and spending the entire session in positive territory. But closing under the noon hour low and under Friday’s high made that optimism ineffectual.

Still, there is only a pattern of expending buying pressure intraday without the effort gaining traction through the close. Without breaking support through the close, there is no signal of momentum reversing down. So, there remains potential for early strength, and likelihood for later weakness.

What’s Next… (Outlook and opportunities)

Nothing much on Tuesday’s econ calendar, but plenty of Eurozone headline risk to keep volatility lively.
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.

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.