Trading Plan for 12/6

If the Employment Situation report isn’t the catalyst for a deeper decline… then can a retest of last week’s highs be avoided?

Pattern points… (Setups and technicals)[pay]
Thursday’s session was spent entirely in negative territory, but remained within Wednesday’s range. That doesn’t mean buyers patiently preserved their energy. Something prevented buyers from exploiting that sellers were so weak-handed. The afternoon’s 1782.00 low probed the morning’s 1783.25 low without extending down. But that pessimism isn’t “ineffectual” unless their 1790.00 interim high had been retraced to some relevant degree. It was not.

The market is greeting Friday’s Employment Situation report from a weakened posture. Sellers are crouching defensively to discount a negative reaction, but not enough to fully discount it. Testing a relevant support and closing back above it would have made a negative knee-jerk reaction likely to recover. Instead, a favorable knee-jerk reaction is likely to fail.

Oversold RSIs at Wednesday’s 1777.75 low remain outstanding and requiring a retest. Neutralizing the attraction in time to exit the opening 15 minutes of volatility above a relevant support could put in a bottom for the day. Otherwise, its support was already chipped away, so its break through a relevant timing window could trend down substantially intraday.

Maintaining a gap up above a relevant resistance may be the only path up. There is no unfinished business to attract higher, so holding up anyway would be bullish.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Having yet to fulfill the consequences of the bearish sequence since last Friday’s high, trending down a little could mean trending down a lot. Being a Friday, the morning’s bias signal is likely to remain influential through the noon hour. So, not trending down initially could marginalize sellers for the day.[/pay]

Look for at least one update overnight or ahead of the Morning Market Tour… My thoughts on the day’s econ calendar are linked here.