Trading Plan for 11/7

[pay]Pattern notes.
Thursday’s second-to-last hour corrective bounce was required to resolve in new session lows. New lows were met, fulfilling sellers’ mission. Price firmed to close back above the bounce’s origin, robbing sellers of their traction. At this point the decline is usually retraced back up to its prior target.

An overnight bounce did retest the intraday decline’s prior target at ESz 913’00. The bounce extended up to within 1 point of the decline’s prior prior target at 927’00 and then back down again to 913’00 as support. Buyers have fulfilled their mission, and now they are losing traction.

Turnabout is fair play, and the door has opened to resume the decline. But since the door has been opened, the decline had better step through it. Otherwise, a vacuum will be left, which the market abhors. Buyers would be sucked back in to fill the void, and to drive price higher instead of lower. Probably sharply higher or lower, since the impending weekend tends to leverage the fear of being short or long during two days of illiquidity.
Indicators and Internals.
Oversold 3-minute RSI just accompanied the overnight pullback’s most recent low, so sellers probably aren’t yet finished. But there is no other unfinished technical business attracting price in either direction.

Friday’s opportunities.
There is no requirement to retest overnight highs since they are under yesterday’s highs. But retesting the overnight high anyway would suggest that sellers don’t intend to influence today’s price action.

There is room back up to 917’00-918’00 before buyers start regaining traction. Meanwhile, sellers start gaining traction under 911’00. Back under 908’00 should put 890’00 back into play.

This being a Friday, any trending maintained through the cash session’s open is likely to persist well past the noon hour. This morning’s Employment Situation report news is just one hour away. Econ reports due at 10:00 might try to redirect the Employment report’s initial reaction. [/pay]