Thursday’s bounce did what… Wednesday’s session did not, and finally reacted to Wednesday morning’s plunge. Thursday’s reaction was up, which was likely since all of Wednesday’s instead of resuming the drop.

Pattern points… (Setups and technicals)

Thursday’s extended narrowing range finally broke. It broke higher, and finally fulfilled the afternoon’s 1256.25 bias-up target. Breaking out after 3:00pm instead of before, and fulfilling buying pressure, both made the breakout vulnerable to reversing down. But it did not.

1256.25 was still being tested or overlapped withing minutes of the close, so it was not recovered. Having been the corrective bounce’s objective, the corrective bounce may now be done.

Regardless, the pattern’s resolution should be in-play at Friday’s open. The fast-approaching 3-day weekend will make Friday afternoon’s volume evaporate. Any trending or rejection of any trending — or any trending and its rejection — must develop overnight or almost immediately Friday to gain traction.

What’s Next… (Outlook and opportunities)

HAPPY NEW YEAR! Thank you so much for letting me part of your trading world in 2011. The opportunities for 2012 seem very exciting, and I look forward to sharing in them with you.

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.