Trading Plan for 4/2
[pay]About that close (How the prior session ended)
Thursday’s last hour recovered the afternoon’s drop. It had originated during a no-bias environment, which required its retracement. The 8-point drop to 1166.25 nearly filled the open’s gap, falling more than 11 points under Thursday’s high. But no-bias means no-bias, and the retracement’s 1173.75 target was met at the close.
Pattern points (And technical influences)
No-bias trending is retraced because its timing reflects the weakness of its sponsorship. The timing of its retracement is reflective of the newer sponsorship attracted to counteract the no-bias trending.
So, an immediate retracement in the very next timing window reflects the newer sponsorship’s relative strength. It also means that the newer sponsorship is relatively newly formed. Being newly formed makes it less committed. A later retracement would have reflected much stronger sponsorship, benefiting from the extra time to form.
Thursday’s buyers were just stronger than sellers, as implied by quickly recovering the afternoon’s earlier dip. The recovery is likely to extend initially. Extending the recovery is then likely to find plenty of willing sellers.
Caveat: Likelihoods are a function of variables in a constant environment. Friday’s “session” is anything but, due to two oddities. Firstly, regularly scheduled economic reports are normally rescheduled when they happen to fall on a holiday. The Employment Situation report has been historically no exception. Secondly, the Globex session that normally trades to 11:30 ET, but this Friday will close at 9:30.
Bottom line (My underlying premise)
We’ll be in the chartroom (there’s no bias parameters or other updates). It will be quick, possibly weird, and certainly interesting. Rather than a daily Morning Market Tour before the open, we’ll record the normal daily market wrap after futures close. [/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.