Trading Plan for 4/12

[pay]About that close (How the prior session ended)
Dow 11,000 came Friday not with a bang, but with a whimper. The last half-hour of any session is not reliable unless a pattern’s breakout is already trending. Friday’s two consecutive no-bias environments held Tuesday’s 1188.00 high as resistance and didn’t trigger any higher target. But the surge’s cash session’s close met the afternoon’s 1190.50 bias-up target, and the futures close touched 1193.00.

Pattern points (And technical influences)
Friday’s open filled the gap back to Thursday’s 1183.50 close twice. This overkill typically means a much deeper third test is coming. One attraction lower could be that Friday morning’s no-bias environment has yet to meet its 1179.50 objective.

Another attraction lower could be the two-week old Complex Triangle. It 161.8% Fibonacci extension at 1193.50 was nearly touched after Friday’s close. A conservative calculation was met and held by Tuesday’s highs. At least some negative reaction is likely again.

Gapping down Monday under 1185.00 would trigger that negative reaction, and a session-long decline. Such a reaction would be very negative initially, but ultimately it would be bullish – its gap would create unfinished business back to Friday’s 1192.75 close. Extending higher first before reversing down Monday would be bearish.

Friday’s late surge already meant little before it even started, having waited so long before beginning. The narrowing intraday trading range formed a Triangle that already suggests the breakout is false. Nearly touching the 1193.50 objective while briefly piercing Dow 11,000 suggests that its peak is already printing.

Bottom line (My underlying premise)
Monday’s only alternative to producing a noticeable peak should be noticeable, itself. Not just trending higher, but also trending throughout the morning. Maintaining new highs going into the noon hour would help greatly to marginalize sellers. [/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.