Trading Plan for 1/4

If Thursday afternoon’s slide was defensive posturing ahead of Friday’s Employment Situation report… then mildly surprising or in-line numbers should allow fresh highs. But look out below if “too many” people have jobs, considering the FOMC latent hawkishness.

Pattern points… (Setups and technicals)[pay]
Thursday afternoon’s slide never intended to reverse the trend down. No more so than the morning’s rally intended to extend the week’s uptrend. Simply, having retested Wednesday’s 1458.00 high, and with the afternoon’s FOMC news impending, there would not be sponsorship for trending. Defensive posturing ahead of Friday morning’s Employment Situation report also inhibited buyers.

FOMC Minutes had an unusually hawkish bias, but a retest of the morning’s 1452.75 low was already likely. Lower lows down to 1450.00 already punished the excessive optimism that made 1452.75‘s retest likely, as well as the excessive optimism on its retest.

Thursday’s 1454.50 cash session close ultimately robbed sellers of their traction. Violated bounce limits had already suggested as much. That was not high enough to suggest holding long into the close, especially not ahead of Friday’s pending news.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Being a Friday, a probe of fresh highs might not be rejected at all if not rejected early. Not unless the probe were unable to extend throughout the morning. Similarly, reacting down would be difficult to recover before the open.[/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.