Trading Plan for 4/29
Getting over the hump… Wednesdays are normally referred to as “hump day,” for being midweek. Thursdays are a big hump day for a trend. Like a session’s last hour, trending into the week’s last day is difficult to reverse before the weekend. But Thursday’s session didn’t actually trend…[pay]
Pattern points… (Setups and technicals)
Wednesday’s close left the potential for a correction down to 1346.00. That didn’t prevent a detour overnight to new highs. But a drop from 1356.25 did reach 1346.75 before the open.
Positive territory above 1351.00 was recovered through the open. So, despite the 9-1/2 hour, 9-1/2 point drop, the cash session never really experienced the correction. And each of three separate intraday thrusts above 1351.00 was retraced. So the cash session almost didn’t experience a rally, either.
A fourth thrust higher into the last hour did reach new highs at 1358.50. But it came too late to be durable, still holding earlier highs through 3:10-3:20. The surge began just minutes later, and was then retraced into the close back under Wednesday’s high to 1356.50 and 1355.00. It was retraced to 1354.00 at the Globex open.
Excessive optimism delayed the correction after Thursday’s close (detouring first to new highs). Excessive optimism limited the correction to overnight activity. A excessive optimism prevented each intraday pullback from turning negative. Trying to rally on excessive optimism finds buyers depleted just when they are needed most. Thursday’s momentary new high offered a glimpse of the consequences.
What’s Next… (Outlook and opportunities)
There is no unfinished business above. Wednesday night’s “new Globex trend extreme” was probed late Thursday, and then rejected. Thursday’s late surge also probed and then closed back under Wednesday’s intraday highs. Gapping down Friday under 1351.00 could take on plunge-like dimensions. Not gapping down could range sideways into the 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.