Trading Plan for 5/13

1346.00-1348.00 was a big target area… It held as resistance or was still being tested into Thursday’s close. Buying pressure that created the target was satisfied, and the target held. But it wasn’t rejected, not by Thursday’s close.[pay]

Pattern points… (Setups and technicals)
Closing under 1340.00 would have made Friday likely to decline throughout. But Thursday’s reaction off of its highs held 1343.00. Perhaps sellers are keeping their energy in reserve. Or they don’t have any.

If sellers are saving it in reserve, then they’re waiting for another fresh high. That would be vulnerable to reversing down sharply, like Wednesday’s pre-open surge up to 1358.50 after Tuesday’s rally. Now, 1351.50 would suffice, with a reversal triggered back under 1346.25.

Maintaining a gap down under 1340.00 could also reverse momentum down, without requiring any bounce before extending down. That could be difficult.

The alternative to reversing down Friday could just as easily range narrowly, instead of extending higher. Potential to resolve bearishly only requires that 1346.00-1348.00 hold as resistance – not that its first test be rejected.

What’s Next… (Outlook and opportunities)
We’ll be watching early strength for signs that buyers aren’t gaining any traction. Waiting to surge until 8:30’s econ report would be easier to absorb and reverse down. Simply trending down could be absorbed, too, although not necessarily Friday 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.