Trading Plan for 4/5

[pay]About that close (How the prior session ended)
After a momentary knee-jerk blip down to 1170.25, the Employment Situation report’s reaction surged to 1176.00, and then extended to 1178.75. Its sponsorship was enhanced by the residual buying that had retraced Thursday’s no-bias trending. Having recovered that drop so quickly, follow-through to higher highs became likely, and that has been fulfilled.

Pattern points (And technical influences)
Friday’s follow-through fulfilled the required behavior, which was to probe higher highs. This doesn’t necessarily mean the higher highs fulfilled buying pressure. Fulfilling the optimistic behavior makes the market vulnerable to a dip. Dipping while there is outstanding buying pressure makes that dip a buying opportunity.

That is, so long as the dip is within reason. A pullback to 1172.00-1173.00 would be optimal. Under 1170.25 would be dangerous, setting up a test of 1165.00. And a break under 1163.00 would trigger a Double Top targeting 1144.50.

Otherwise, whether recovering from a dip or simply extending higher, buying pressure would be fulfilled by new highs at 1181.00 or 1183.50. Any higher through a relevant timing window would put into play 1191.75 and potentially 1193.25. For as many longer-term predictions called for 1200.00, either price will push down aggressively before these next higher targets are met, or else meeting them would all but ensure blowing through 1200.00.

Meanwhile, note how the proposed Double Top’s interim consolidation is sloping upward. This pattern’s reversal typically takes an aggressive posture, so don’t be lulled into complacency at new highs.

Bottom line (My underlying premise)
Conditions were weird for absorbing Friday’s Employment Situation report. The next week’s open will still be reacting to the news, but also to the reaction to the news. And I don’t think the action will be subdued. Note in the above charts that price as recently as Wednesday Mar 31 was still overlapping price action from two weeks earlier on Mar 17. This is not typically where a chart stands still. [/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.