Trading Plan for 4/30

The Saturday Strategy Session is linked… from the blog’s sidebar (it’s not held in the normal Chartroom), and it begins at 9:30am ET. We’ll review the market’s bigger picture, and then do an instant analysis for any stock or futures chart requested.

Pattern points… (Setups and technicals)[pay]
It’s official. The bearish trend change that was signaled Apr 9 by closing under 1386.00, has been invalidated by Friday’s second consecutive higher close above 1386.00. Sellers are back at square-one, and retaking control requires triggering a new signal.

Invalidating the trend change does not equate to being a buy signal.

But Friday’s price action came as close as possible to triggering a buy signal. Its 1399.00 cash session close was still testing the 1397.25 high of the Apr 4-5 structure. Since that structure contained the gap that was filled Thursday, closing above its 1397.25 high would create an attraction to the next higher gap outstanding at 1408.00.

Meanwhile, a dip holding 1394.50 as support would still be likely to resolve up. The structure’s 1389.00 lower-end must break to undermine any further recovery potential. Simply extending higher at Monday’s open would signal the rally has resumed.

[/pay]What’s Next… (Outlook and opportunities)[pay]
We could not consider a “hold-long through the close” Friday since the close was under its 1400.75 opening print, after probing fresh highs intraday. Immediate strength would reject Friday’s lower relative close, as if the close were higher. The appropriate behavior would surge, compensating for the delay, if maintained through the opening 15 minutes of volatility. So, almost any opening weakness would suggest a deeper pullback underway, first. [/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.