Trading Plan for 12/4

[pay]Pattern notes.
Thursday morning’s open surged to a new high, fulfilling the bias-up target, and then reversed down back under prior highs without recovering. The same can be said for Wednesday’s open. I sense a pattern. Until Thursday’s last half-hour, the pattern almost repeated the last several sessions’ aspect that had repeatedly prevented sellers from gaining traction. Not this time, far from it.

Or did it? The last half-hour’s plunge from 1108.50 tested 1099.00 by 2 ticks. A bounce into the close didn’t get very far before reversing back down to 1098.00. But the session ended while still in the process of testing 1099.00. So, not only was a relevant support being tested and potentially holding, but it was also being tested by a deep uncorrected drop during an unreliable time. It might even have been a knee-jerk reaction to an official’s statement.

All of which would suggest sellers were lucky to get away with what they got Thursday afternoon. Friday’s session might yet be all about testing 1105.00-1107.00 as resistance. A gap up into or above that zone could even probe new highs.

Otherwise, extending the drop Friday would require either a quick bounce and back up to 1105.00-1107.00 and its rejection, or a gap down maintained under 1095.00. Sellers would lose a lot of traction by holding an opening test of 1095.00 instead of breaking it. And breaking it could be disastrous going into the weekend.

Indicators and Internals.
RSIs were oversold throughout the dive, dooming any bounce to failure, but that can be resolved overnight. The 1-minute RSI made a higher low into Thursday’s final minutes when the last-minute bounce fell to a lower low. The only way to extend the drop Friday without a bounce is to gap down under 1095.00.

Friday’s opportunities.
Employment Situation report. Employment Situation report. Employment Situation report. Impending two days of illiquidity. I’ll expand on this overnight if price action merits it.[/pay]