Trading Plan for 12/3
[pay]Pattern notes.
Wednesday’s opening 7-point surge had made quick work of probing new highs. Quick work, that is, if ignoring two weeks of having come within ticks of touching the prior high. An 11-point slide made quick work of the open’s quick work, effectively sentencing the balance of the session to range at or under Tuesday’s close.
It was a second consecutive close essentially at 1108.50, as was the open. Anxiousness ahead of Thursday morning’s Jobless Claims data inhibited Wednesday afternoon’s volatility, limiting it mostly to a 3-point range. But the morning’s round-trip wasn’t cut short by the anxiousness – the round-trip was compacted to fit into the available time.
This does two things, the same two things that were done by overnight bounces to 1111.00. Wednesday morning’s surge chipped away at resistance, which would be important if its resistance were ever retested. And it also created room to absorb selling pressure without letting it damage the chart. In fact, Wednesday’s close was essentially unchanged, despite its intraday 11-point plunge.
Wednesday morning’s surge also does a third thing that wasn’t done the previous night. There was unfinished business above, and it was resolved. Furthermore, it was resolved without creating any new business like a gap.
Sellers still didn’t gain traction, so another positive reaction or rally attempt is possible on Thursday’s Jobless Claims. But with no unfinished business above, the potential to begin a new upleg faces a growing burden of proof on buyers. If the range hasn’t broken higher through Thursday’s close, then sellers would start getting a benefit of the doubt.
Indicators and Internals.
Oversold RSIs at Wednesday’s low printed during the noon hour. The timing makes their retest likely but not required. Overbought RSIs at the morning’s high weren’t both overbought simultaneously, so its high also doesn’t require a retest.
Thursday’s opportunities.
The econ calendar isn’t light. Jobless Claims is due before the open, but it won’t be announced alone. It might also affect anticipation for Friday’s report. Then another item is due 30 minutes after the open. Perhaps the afternoon’s volatility will be sucked dry again, but the morning’s action will try its best to get the ball rolling.[/pay]