Trading Plan for 5/2

If the FOMC reaction was only brief and muted… then can the Employment Situation report be any more productive? After all, FOMC news has become as influential to price action, if not more so. But this week’s 2-3 knee-jerk reactions were still being overlapped Thursday.

Pattern points… (Setups and technicals)[pay]
I’m labeling Thursday’s session “ineffectual pessimism” for only briefly probing a fresh high, and for dipping temporarily to the range’s lower-end. Not that buyers got much for their own efforts, but they did get something. That’s because despite there being no requirement to probe fresh highs, fresh highs were probed anyway. That qualifies as chipping away at resistance.

Ineffectual pessimism ahead of Friday’s Employment Situation report suggests there is still a “wall of worry” to climb before a downtrend can begin. Chipping away at resistance helps to climb that wall.

New highs are still about 8-10 points away, and I would expect any rally to attack them. Then the questions would be about whether the close was a new high, whether prior intraday highs were probed intraday, and whether the new high close was above prior intraday highs — all of which would speak to whether the rally had entrenched itself further.

[/pay]What’s Next… (Outlook and opportunities)[pay]
There tends not to be much volatility or trending the night before a monthly Employment Situation report.[/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.