Trading Plan for 4/15
If the breakout were going to be invalidated… then Friday’s probe under Wednesday afternoon’s lows was the opportunity to do it. It didn’t. But closing Friday under Wednesday’s high isn’t reassuring, especially with so much unfinished business below left outstanding. Between the prior Friday’s gap down, and last Monday’s no-bias trending, these new highs seem tentative.
Pattern points… (Setups and technicals)[pay]
The only time Friday spent above Wednesday’s 1584.25 highs was during the first half-hour. And then, only briefly. More time spent under Wednesday’s 1579.50 noon hour low, but it held as support through the close. The opportunity to invalidate Thursday’s confirmation of Wednesday’s breakout was attempted, but it failed.
That doesn’t mean the rally will resume without further delay. Or without further decline. Buyers did not gain traction for their afternoon efforts Friday, or for absorbing the morning’s drop, so a fresh low could print in even the most bullish scenario — the difference between that, and the most bearish scenario, is that Monday’s close would likely recover.
Closing back above Wednesday’s 1584.25 highs would have trapped shorts. But Friday’s noon hour and last-minute attacks on 1584.25 did not extend higher. Although Friday’s 1575.00 low doesn’t require a retest, it will probably be probed by any morning weakness Monday.
Avoiding a retest of Friday’s low is possible, but probably only if a rally were underway already before Monday’s open. Opening above 1586.50 could avoid backing-and-filling back into Friday’s range. While the rally would be expected to probe new highs, the retest would be much likelier to hold.
[/pay]What’s Next… (Outlook and opportunities)[pay]
Join us this weekend for the Saturday Strategy Session. Bring your stock ideas for instant analysis after we discuss the market’s bigger picture, and the week’s opening strategies. [/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.