Trading Plan for 5/2

Fridays often get one shot at changing the trend… Friday’s opening strength stopped pessimistically short of probing prior highs. It barely touched resistance, but touched it long enough to trigger no-bias. Sellers didn’t exploit the opportunity – not by much, and not for long – so they were marginalized for the day. [pay]

Pattern points… (Setups and technicals)
There is “unfinished business below” at 1351.75. It was the morning’s bias-down signal. The open’s high barely touched the 1358.75 bias-up signal before triggering no-bias, which put it into play. Recovering 1358.75 through the bias environment lapsing would have invalidated the 1358.75 objective. But 1358.75 was still being tested through noon, so 1351.75 must be tested eventually.

1358.75‘s attraction Friday was interesting. Every timing window touched it, including the position-squaring window. A higher high was probed between each touch. This action thoroughly discredited upside momentum. In fact, the cash session’s close was under the noon hour’s high.

So, a post-close 4-point surge up to 1363.75 is doubly interesting. Originating after the cash session close means it is not predictive. The timing also means its immediate rejection at Monday’s open – gapping down under its 1358.75 – wouldn’t require its retest.

What’s Next… (Outlook and opportunities)
New highs be damned, there was no interest in being short through the weekend. That sort of extreme sentiment tends to accompany trend extremes, or at least begins their formation. So, 1363.50‘s post-close test is interesting because it is the next higher objective above 1353.25, which barely triggered Thursday. Holding its test again through Monday’s open, or simply extending under 1352.25, would be bearish. Recovering 1363.50 through a relevant timing window would be bullish. [/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.