Trading Plan for 4/1
[pay]About that close (How the prior session ended)
A three-hour narrow trading range finally ended when the afternoon’s no-bias environment started lapsing after 2:30. The gap back to Tuesday’s 1169.50 close had held multiple tests as resistance while refueling sellers. A test of 1165.00 was still likely before the close, and it was probed down to 1162.75. RSIs diverged positively, producing a bounce into the close reached 1168.00.
Pattern points (And technical influences)
It’s too late to signal that sellers have regained control. But Wednesday afternoon’s renewed sell-off gives them a benefit of the doubt again. Bounces to resistance have the burden of proof for extending higher. Tests of support are likely to break lower, if only for brief dips to the next support.
Sellers had came very close to being marginalized through Friday. Perhaps they were. Wednesday morning’s sell-off that started overnight couldn’t have waited any later to begin. Its drop had mixed results, the most bearish of which was to give sellers more time. Even that extra time needed extra time, missing both ends of the noon hour.
The bounce into Wednesday’s close retraced too little of the last hour’s drop to invalidate it. The 1168.00 lower-end of the mid-day consolidation held as resistance. A gap up above the range’s 1170.50 upper-end would marginalize sellers. Otherwise, price should range back down to the 1163.00 area.
Bottom line (My underlying premise)
It might not be done Thursday, but another decline could still be attempted. Last Thursday’s sell signals were confirmed by Friday’s lower lows. That confirmation also fulfilled the least selling pressure, that might have also ended the signals being confirmed. Monday and Tuesday’s action (lack thereof, actually) ruled out whether sellers were satisfied. And this last point was confirmed by Wednesday’s morning and afternoon drops.
More jobs metrics are due Thursday, offering the last chance to tweak expectations ahead of the Employment Situation report due on Friday. Their impact should continue to be bigger than usual since there’s no cash session Friday, and futures close 45 minutes after the news.[/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.