Trading Plan for 4/12

If Thursday’s breakout confirmation isn’t valid… then we’ll know immediately at Friday’s open. Not extending higher immediately wouldn’t necessarily be bearish, it could even be bullish. But launching a downleg anytime soon would require that this week’s rally be somehow invalidated.

Pattern points… (Setups and technicals)[pay]
Thursday’s rally confirmed Wednesday’s breakout with a second consecutive higher close. The minimum requirement for the setup is to produce at least one more higher close — not necessarily in the very next session. In case of an immediate drop, with one exception*, the drop would be expected to recover.

The session high printed Thursday morning. The afternoon’s downtrend of lower highs and lower lows formed a Flag. The pattern tends to break higher to resume the rally without further delay. When the pattern breaks lower first, it is likely to recover.

*Since the Thursday’s confirming session printed its high during the morning, the confirmation could still be invalidated. Opening under Tuesday’s 1584.25 highs, then extending under its 1579.50 noon hour low, would be as if the rally never extended. Downside objectives would include 1574.50, and potentially 1569.50 or 1561.25. Extending the rally would target 1612.00 and higher..

[/pay]What’s Next… (Outlook and opportunities)[pay]
Thursday was the third consecutive session without the customary so-called 3:30 ramp. That’s not a technical issue, and the ramp is probably just psychological (if not mythical). But that’s enough reason to take note of a potential sentiment shift.[/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.