Trading Plan for 4/30

If stocks fall from Tuesday afternoon’s narrow range… then will they make a sound? Monday’s wild choppiness had already made the market vulnerable to pulling in its reigns to rest. Tuesday morning’s choppiness almost required it.

Pattern points… (Setups and technicals)[pay]
Wild choppiness can be predictive in expecting its “shock to the system” to paralyze price action. Monday’s was an exception, because its highs had been “ineffectually pessimistic,” suggesting some delayed upside follow-through.

Tuesday morning’s upside follow-through also stopped pessimistically short in a couple of significant spots. So, some more upside follow-through Wednesday morning, perhaps?

Unlike Monday’s close, Tuesday afternoon didn’t bequeath any upside momentum to Wednesday’s open. Pre-open high-profile news like ADP and other earnings could lift the inhibition. A pullback first wouldn’t be surprising either, as defensive posturing ahead of the afternoon’s FOMC announcement.

That’s the problem with a narrow ranging afternoon — little about it is predictive.

[/pay]What’s Next… (Outlook and opportunities)[pay]
ADP’s jobs report sort of kicks off the three-day focus on Friday’s Employment Situation report. Its validity is controversial, but its influence on price action is reliable. Any trending should run its course early, as anxiousness ahead of the afternoon’s FOMC decision often paralyzes volatility by late-morning.[/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.