If there is going to be a daily reversal down then price will extend upwards from Thursday’s 5-day high break and continue into Friday’s highs.
Any potential reversal down will come from the 5-day highs on Friday back down into the 5-day 50% levels (closing on the lows)"
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S&P Weekly and 5-day patternThis week’s UP move had to be verified with the break of the 3-day cycle and trading above the Weekly 50% level.
Normally when this occurs I would look for a 2-day reversal pattern and then continue higher in the new week using the weekly 50% level as support
However, being Friday that reversal could be only 1 day, and then continue higher from Monday.
Therefore my preferred pattern was not to see US markets continue to move higher, but to follow my preferred pattern:- Friday moving up and then closing near the 5-day 50% level, and then trade longs on Monday using the Weekly 50% levels as support.
The Weekly 50% level is the trend guide for next week, but we are starting the week from the highs
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