Trading Plan for 4/30

[pay]Pattern notes.
Wednesday’s session traded exclusively in positive territory (optimism). Its intraday high probed two prior bounce highs (optimism). The afternoon’s high exceeded the morning’s high (optimism). The close was back under a prior high and under the noon hour’s high (uh-oh).

The rally dodged a bullet by not also closing under a second prior high. Starting the day from under two prior highs, probing both prior highs intraday and then closing back under them is a very bearish setup. Its follow-through tends to be immediate, so gapping down Thursday would get a benefit of the doubt for being triggered late. It would also get a tight stop, since there wouldn’t be any reason to bounce until having extended down under at least 857’00-858’00. The move would target 851’00 and 845’00.

Buyers lost traction by closing back under the noon hour’s highs. An overnight bounce isn’t likely, but it would be likely to fail. The same can be applied to sellers, who failed to gain traction by closing under the noon hour lows. As for the premise that a multi-week trading range is underway, Wednesday’s highs held a test of its upper-end, and the range remains intact.

Indicators and Internals.
There were no unfulfilled technial signals or setups at Wednesday’s close, except for one minor item. The 1-minute RSI diverged positively at the last half-hour’s low while MACDs made higher lows.The 3-minute RSI didn’t confirm this.

Thursday’s opportunities.
Overnight influences include a presidential speech. I will be on-line to comment on any reaction no longer than an hour after the speech. Thursday’s econ calendar is pretty impressive, from Jobless Claims pre-open to Chicago PMI after the open. Gapping down Thursday could extend, but it wouldn’t be as credible as simply sliding. Meanwhile, a gap up Thursday may be the only way this pattern resolves up longer than temporarily. [/pay]