Trading Plan for 4/23
[pay]About that close (How the prior session ended)
Thursday’s closing action ranged narrowly around Wednesday’s… wait, no… Thursday’s last hour extended into positive territory above… nope, turned again… Thursday’s closing action retraced a probe above 1202.00 that had reached 1207.00. The cash session close equated to 1205.25, but futures fell to 1200.25.
Pattern points (And technical influences)
Wednesday’s close had failed to recover 1202.00. The immediate consequence was that futures dipped to 1199.50, and then Thursday’s open extended down to 1186.25.
Thursday’s close seemed like déjà vu. Not the cash session, which ended comfortably higher. But a post-close dive to 1200.25 left the futures session testing 1202.00 as support. Thursday’s futures close isn’t outright bearish like Wednesday’s signal. But it still contradicts the cash session close.
The last hour had launched a probe above the afternoon’s prior high. Had it been maintained, then Friday’s open would have quickly probed last Thursday’s 1210.50 high. Potential remains alive for an opening surge because at least the cash session close wasn’t retraced. An opening surge would have also been likely had futures held up, too.
Bottom line (My underlying premise)
Simply firming throughout Friday’s open would at least marginalize sellers for the day, and keep alive potential to new highs. An opening surge would be vulnerable to retracing – and retracing quickly through the 10:15 bias timing window would be very bearish.
Almost any initial weakness Friday would essentially confirm that Thursday’s futures close overruled its cash session close. Whether or not “lower prior highs” at 1194.00 produced an obligatory bounce, the oversold RSIs at Thursday’s low would be in-play, to be met intraday or Monday.
One final note: Thursday’s “session-long decline” setup would have clearly failed if positive territory were clearly recovered. It wasn’t. The setup’s failure would have resulted in new highs. It might still. But if the session-long decline hasn’t failed, then Friday will fulfill it, with a drop that compensates for the delay. [/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.