Trading Plan for 2/6

If this third visit to recent highs reacts down again… then is it likely to retrace back to interim lows? No. Having tested the area of Thursday”s high twice during the current multi-month channel, the only credible reaction down would come from a fresh high close. Dipping any earlier from any lower would likely retrace only a portion of the past week”s rally.

Pattern points… (Setups and technicals)
Two consecutive mornings Tuesday and Wednesday reflected accumulation that made their midday flat-to-lower ranging likely to resolve up. And despite Wednesday afternoon”s buyers not gaining any traction before probing higher, the post-close plunge was recovered anyway.

Now comes Thursday”s session, apparently trained to expect the afternoon probe of fresh session highs. The midday flat-to-lower ranging once again prevented buyers from gaining traction. But a very late effort extended higher.

The rally from January”s ~1980.00 low eventually targeted 2059.00. It was attacked to within 1 tick at Thursday”s late high. Hesitation there reflects pessimism, which is potentially bullish from a contrarian perspective. This doesn”t require trending higher without delay, but it makes an initially negative knee-jerk reaction to the Employment Situation report likely to reverse up.

What”s Next… (Outlook and opportunities)
Gapping down under Thursday”s 2048.50 noon hour low might be the only credible way to avoid fresh highs Friday. Fresh highs would be vulnerable to reversing down — earlier rather than later, if at all.