Trading Plan for 4/11
[pay]Pattern notes.
The no-bias rally required a complete retracement back to its ESm 1355’25 origin, despite the rally having reached 1369’25 in the interim. It never ceases to amaze when the market does what it is supposed to do. Actually, only 1357’50 was retraced before bouncing back up to 1363’00 after the cash session close, then nearly 1365’00 after the Globex open.
Having left unfinished the complete retracement back down to 1355’25, Friday’s open should be attracted lower, and back under 1360’00 at any time would signal the retracement had resumed. Thursday morning’s retest of Wednesday’s 1351’25 low was of the same character and weaker technicals, making its eventual break very likely, probably on the way to 1347’50 and lower. Extending the recovery overnight instead to gap above Thursday’s 1369’25 high would be bullish for a couple of days into next week.
Indicators and Internals.
MACD & RSI were deeply negative enough at the afternoon’s low to require its retest. That’s just one more factor compelling S&Ps to resume the no-bias rally’s retracement. Internals were actually accumulative. But the spread between NYSE up and down volume was narrower than the spread between advancing and declining issues that it produced. The session’s flat to lower volume softens any obligation to reward Thursday’s buyers
Friday’s opening setup.
The pre-open Import and Export econ report isn’t usually very high-profile but has gained influence over price action with inflation rearing its head. But Consumer Sentiment is much sexier and it is due 30 minutes after the open at 10:00am, timing that tends to reverse or accelerate any trending already underway. If S&Ps have rallied overnight above Thursday’s highs then that would be the last hope sellers have to retake control before mid-week. Otherwise, if the week’s lows are already under attack, there won’t be much to prevent falling lower with buyers having been rejected so much recently, and with two days of illiquidity just hours away.[/pay]