Trading Plan for 2/9

If the NFP reaction were initially down… then its recovery would have prevented the afternoon”s drop. The afternoon might have extended much higher already. And that optimism would be expended, instead of ending the week pessimistically discounting bad news..

Pattern points… (Setups and technicals)
The week”s pervasive optimism was identified throughout by the timing of its post-open dips that recovered to fresh session highs. Friday”s reaction to the Employment Situation report underscored that optimism. But despite trending down into the close, optimism”s back isn”t yet broken.

That”s the point of probing a fresh high — it creates room to absorb selling pressure without damaging the trend. And Friday”s probe of fresh highs held up well into the noon hour before reversing down. Through Friday afternoon. The least relevant window of the week.

So, Friday”s reversal down was substantial, and its sellers gained traction for their effort (exiting the bias environment under the noon hour”s low, and entering the final hour under the bias environment”s low). But the drop”s minimum 2044.00 target was met to within 2-3 ticks. The 2041.00 lower-end of the target range could or should be met, too. But until a relevant window breaks below it, last week”s rally is likely to resume.

Even then, not holding 2041.00 would target another 12 points lower. If the pullback must extend that deeply before resuming the rally. then its test should be well underway Sunday night. Any deeper pullback than that could prevent resuming the recovery, since new lows would be in-play.

What”s Next… (Outlook and opportunities)
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