Trading Plan for 2/2

If Friday”s range were any wider… then it might have touched either end of Thursday”s range. Friday”s post-open high to post-open low measured ~31 points. Fun Fact #1: the prior session”s range was 37 points. Fun Fact #2: that represented the last 90-minutes of trending. Fun Fact #3: all of Friday”s range was contained within Thursday”s.

Pattern points… (Setups and technicals)
Friday was an “inside day,” biased downward, in a downtrend. Most any other day, that would make it difficult to extend the downtrend. The next day would be likely to rally, or else an immediate probe under prior lows would likely recover into a rally.

Friday”s aren”t as predictive. And regardless of the open”s gap down, the intraday bias was flat until the afternoon”s bias environment began lapsing. That last 90-minute window was greeted at post-open highs, which had just filled the gap back to Thursday”s close.

So, except for that last 90-minute plunge, this setup on most any other day would be likely to extend the downtrend.

Thursday”s pivotal low (the low prior to its actual low) was narrowly avoided. Touching it would have entrenched the afternoon”s downward momentum to ensure absorbing a bounce. That could be bullish, to the extent that the bearish setup was avoided.

The late-morning reaction to the Greece headline”s trial balloon should be a warning that favorable news over the weekend could trigger a bigger rally Monday. Thursday”s bullish Pivot Reversal didn”t produce, but neither was it rejected. Regardless, making it through the weekend without favorable news would be likely to probe sharply lower.

What”s Next… (Outlook and opportunities)
Join us this weekend for the Saturday Review. We”ll cover the broader market — tracing out the potential paths higher or lower — and then do instant analysis of your stock chart requests. Click here up to a half-hour before the 9:30 ET start time.