Trading Plan for 4/14
[pay]Pattern notes.
Friday’s last hour probed the prior hour’s low, but didn’t avoided closing under it. On any other day that would be potentially bullish for stealing sellers’ traction. Fridays can be different. Optimism is at work in either case, and it must be strong when managing to appear at the end of a session-long drop to new relative lows. Doing so ahead of a weekend’s illiquidity is something else, indeed. It’s not bullish, although it might allow a corrective bounce prior to resuming the decline.
The very level where S&Ps stopped sliding Friday does also reflect optimism. Having probed the ESm 1338’00 post-open low of April 1’s record rally, the next lower target was put into play at March 31’s 1321’75 close. Friday’s close was between each, leaving the magnetic attraction to fill the outstanding gap. A corrective bounce would likely peak within resistance spanning 3 points up to Friday’s close at 1344’00-1347’00, where any higher close would undermine the bearish scenario.
Indicators and Internals.
If a corrective bounce were going to extend higher and undermine the bearish scenario, it would be driven by the possibly overkill of Friday’s sellers. NYSE down volume was 9.4 times up volume, but produced “only” 3.6 times more declining issues than advancers. That’s still not pretty. And its relevance is a little suspicious because volume’s pace didn’t increase, and deteriorated when backing-out GE’s extraordinary volume. Monday’s session might be obligated to reward Friday’s buyers for their relative performance, but that won’t be impressive unless accompanied by substantial volume.
Monday’s opening setup.
Retail Sales is due before Monday’s open. Business Inventories is due 30 minutes after the open, but it isn’t usually regarded as high-profile enough to influence initial trending. S&Ps have room to firm 3 points before even touching the morning’s bias-up signal, so a lot of energy would be required to trigger it, and meanwhile it is likely to act as resistance.[/pay]