Trading Plan for 5/13

If Monday’s new high close were an intraday high… then closing higher on Tuesday could have confirmed a breakout. Being one day shy of the WedEX, confirmation would buy this rally at least another week of life — even if WedEX weren’t bullish. So it’s interesting that Monday’s new high stopped just short of such a potentially bullish setup.

Pattern points… (Setups and technicals)[pay]
That near miss for a new high close is relative to April 4’s prior high. Its retest was the reward for buyers that had absorbed the interim trend reversal signal, the consequence for those sellers not attracting new sponsorship beyond confirmation. That objective is now fulfilled.

Compared to the past two weeks, Monday’s rally did produce a breakout. A second consecutive higher close Tuesday is the premise, until disproved intraday. Having tested April’s prior high simultaneously, that figures into the calculus. But no reversal signal is in-play.

In fact, hold-long didn’t trigger Monday. But only because the indicator shows no greater likelihood for gapping up Tuesday. Follow-through from the morning’s surge showed no signs of weakness, only hesitation. And again, sellers showed no signs of retaking control.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Tuesday’s session is breakout+1 relative to the recent trading range. It is simultaneously WedEX-1. The influences need not be contrary to make volatility expand considerably. Be aware that Monday’s upward momentum doesn’t require initial trending to be any more reliable for extending.[/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.