Trading Plan for 3/5

[pay]About that close (How the prior session ended)
The last half-hour’s trending attempt validated my suspicions throughout the day that the narrow ranging had something in store for the last hour. It didn’t come until after 3:10-3:20, and not even before 3:30, when a break higher would have been reliable. But it did follow the path of probing session highs.

In fact, the trending developed during the position-squaring window. There certainly wasn’t much enthusiasm for going into the Employment Situation report exposed to the downside. Buyers were the weakest hands – desks and day traders that have to be done by the close, and speculators making a “bet” on a reaction to the report.

From a contrarian perspective, longs should be concerned. Or if given the opportunity to exit into strength, they might want to consider it.

Pattern points (And technical influences)
Had the late surge closed above the morning’s high after probing it, buyers would have gained traction. Had the morning’s high not been probed, then the surge would have been only noise. Instead,buying pressure was expended without gaining traction. That’s not a stable base for launching durable rally legs.

Yer, the late buyers might be right, at least initially, momentarily – and possibly in a relatively big way. After all, sellers still haven’t gained traction in three days of ranging sideways and repeatedly testing Tuesday morning’s 1116.25 low as support. Most of those tests have bottomed impatiently, without first probing a fresh low. A knee-jerk reaction up or early rally to 1129.00-1130.00 is possible.

Thursday’s last-minute surge opened door to an overnight dip. Since it originated during the last half-hour, it can be rejected by Friday gapping down under its 1120.75 or 1119.00 origin. There would be no unfinished business above.

Bottom line (My underlying premise)
Fridays are always interesting, but less so on Employment Situation reports. That’s because the initial reaction can play out before the open. So any trending intraday will need a solid reaction or whipsaw to precede it, to avoid momentum dying on the vine before the weekend.[/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.