Trading Plan for 12/5

[pay]Pattern notes.
The drop resumed Thursday afternoon instead of waiting until Friday’s open. And it fell to 832’00 instead of stopping at 844’50. A lot of selling pressure was expended. The low probed Wednesday’s last relative low of 834’50, so not closing under Wednesday’s low means sellers lost traction.

Sellers could regain control immediately by gapping down Friday under another prior low – like under Wednesday morning’s 826’25 low, for instance. I would give sellers a benefit of the doubt just for gapping under Thursday’s 832’00 low. Otherwise, sellers may have burned a bridge too far, at least for now, and opening above 850’00 would immunize the session from sellers.

An early resumption of Thursday afternoon’s drop that persists through the open would have among its objectives Tuesday’s intraday lows at 817’50. A bounce there would be overly-excessively-optimistic. Filling the gap down to Monday’s 816’00 close and then bouncing would be only overly-optimistic. If buyers don’t regain control Friday, then next week could be overrun by sellers.Indicators and Internals.
3-minute RSI was at a new oversold low on the bar prior to Thursday’s low, so the 16-point bounce into the close is not doomed to failure. But it was an oversold bounce nonetheless, with only 1-minute MACD&RSI diverging positively at the low.

Friday’s opportunities.
Anxiousness ahead of Friday’s Employment Situation report normally inhibits trending on Thursday afternoon. Trending to one side of a range ahead of the news can often be used as a counter-trend indicator. Trending beyond the range can instead frame the reception that the report will get. Unless Friday’s open is gapping up above 850’00 – or if a gap above 850’00 is reversed back under 847’50 – the balance of the session could drift sharply lower into the weekend, and out of it.[/pay]