Trading Plan for 5/1

[pay]The pullback’s ESm 1392’25 target was met, and then exceeded, filling the gap back to yesterday’s close. That was on the way to probing yesterday’s low, which is now trying to hold as support, while yesterday’s close is trying to hold as resistance. That might not be enough for buyers to retake control. Instead there is potential for a substantial trend reversal to be underway shortly.

Today’s new high originated from under the two prior high closes, which the session is on-track to close under. That’s the behavior of impatient buyers who are incapable of sustaining a trend. A close under 1388’00 would be optimal, but just closing under 1395’00 would suffice. The setup has a big caveat. When it fails, it fails quickly, and fails big. So a close back above the two prior highs close (around 1399’00) would signal sellers buyers remained in control and ready to buy aggressively.

MACD & RSI were generally extended and oversold at Wednesday’s last low, making its retest likely. The timing isn’t specific, as the setup is similar to Wednesday’s pre-open low that also required a retest but had to wait for an interim 21-point bounce. Thursday’s econ reports aren’t very influential, but Friday’s Employment Situation report is. That tends to paralyze the market from trending attempts, so a bounce back to the 1396’00 area wouldn’t be surprising.

Addendum: The low was retested at the session’s last-minute, and it was accompanied by MACD & RSI diverging positively on the 3-minute chart. This offers the potential for a bounce, probably within the guidelines described above. A gap under 1381’00 would instead target 1368’00 but still be subject to the pre-Employment report paralysis.

(Did you get multiple copies of the last email? Sorry! I have no idea yet what happened, but it’s being looked into.)[/pay]