Trading Plan for 4/26

[pay]About that close (How the prior session ended)
Friday afternoon’s 1208.00 bias-up signal held a test as resistance through 1:20. It wasn’t even tested until the noon hour had ended. By then it is more appropriate for successful signals to already be serving as support.

1208.00 was being tested as support when the bias environment started lapsing after 2:30. So, that attempt succeeded, trending higher until fulfilling its 1213.50 bias-up target where the cash session closed.

Pattern points (And technical influences)
The post-open dip and late-morning sell-off both held 1202.00 as support (circled green in the above chart). The template for rejecting a probe of new highs was otherwise tracked almost perfectly. It’s nearly impossible to introduce a new trend on Fridays if the morning hasn’t started it. A break under 1202.00 would have started it.

The close above last Thursday’s prior highs constitutes a breakout (highlighted green in chart below). It’s not very credible because fresh highs didn’t print until the session’s last 60-90 minutes, of a Friday. But the breakout would get every benefit of the doubt if confirmed by a higher close on Monday.

And Monday should try to confirm. While analytically a late-Friday breakout tends to fail, behaviorally it initially extends at Monday’s open. Only gapping under the afternoon’s 1206.25 low would reject Friday’s late rally, its breakout, and its likely follow-through.

There’s another challenge undermining an attempt to extend higher Monday. The 1213.50 bias-up target was fulfilled, and it also held on a closing basis. This is “equilibrium.” A close above the target would have left pent-up buying pressure to resume the rally. That’s not going to be available.

Bottom line (My underlying premise)
The two bullish scenarios or at opposite ends of the behavioral spectrum. The first would simply resume the rally and close decisively above 1213.50. The second would first dip to 1208.00 or 1206.50 and then recover. There is otherwise no unfinished business above attracting price higher, but oversold RSIs at Thursday’s 1286.25 low still want to be retested.[/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.