Trading Plan for 5/10

Monday’s bounce… refers to a 30-minute surge. It began when the morning’s bias environment started lapsing after 11:30. It ended soon after noon. In the end, it did nothing to refute patterns in place at Friday’s close that point down.[pay]

Pattern points… (Setups and technicals)
In fact, Monday’s 30-minute surge bisected the day. The morning only ranged around Friday’s 1337.00 cash session close. The afternoon only ranged around the 1345.00 overnight high, without breaking higher.

It was more noise than accumulation. And it was an “inside day,” contained entirely within the prior session’s range. Rising price without gaining traction is “ineffectual optimism.”

The midday surge may seem to offer a buffer that can absorb selling pressure. But the trending was limited to a timing window dominated by weak hands. Other than some obligatory support at 1340.50, there is an air pocket down to 1337.00.

Yet, a higher high can’t be discounted. Although Monday’s Monday’s 1346.25 noon hour high fulfilled the bias-up target, and although its overbought RSIs were later retested, 1347.25 would have been more vulnerable to reversing down. Perhaps that is why there was no reversal down.

What’s Next… (Outlook and opportunities)
Gapping beyond an inside day’s range can extend without requiring the gap to be filled. Gapping under 1335.00-1337.00 would trigger the setup in-play after Friday’s close, targeting a probe under last week’s 1325.25 low. Recovering above 1347.25  would target 1351.75 and potentially 1353.50.[/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.