Trading Plan for 5/14

If Tuesday’s new high close is confirmed Wednesday… then this rally could have bought itself time into next week. Not confirming it isn’t necessarily bearish, but the door below would open.

Pattern points… (Setups and technicals)[pay]
It’s on you, WedEX. That is Wednesday’s Expiration indicator, which will have a chance to trigger at Wednesday’s close. Usually, there’s little point to discussing it before Wednesday afternoon, with so many variables yet to qualify. But so many already have.

Closing Wednesday above Tuesday’s 1898.50 high would signal that expiration is likely to trend up into and out of the weekend, Friday afternoon and Monday morning. Closing Wednesday under 1885.00 prior highs would be bearish — unless 1878.50‘s “lower prior high” were tested intraday.

Tuesday afternoon’s narrow ranging is a concern. When the morning bias environment began lapsing back at the open’s 1892.75 low, all volatility was suddenly sapped from the pattern. A narrow range resisted by 1895.00 developed through the close, absorbing a last-hour attempt to break lower. Not trending at Wednesday’s open — whether from a flat open, or from gapping — could persist well into the afternoon.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Pre-open and post-open high-profile econ reports Wednesday have a chance to shake things up. Get ready to get the dry cleaning if neither one does. [/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.