Trading Plan for 5/20

Breakout, or not breakout… That is the question. If the 1340.00-1341.00 was truly recovered Thursday, then the rally should resume Friday without delay. But if 1340.00-1341.00‘s resistance actually held…. [pay]

Pattern points… (Setups and technicals)
Recovering 1340.50 into Thursday’s last hour could have extended to 1346.00. An errant tick pierced it several minutes later, but there was still time to trigger it by 3:10-3:20. When that window shut, price finally extended higher.

Although price gradually rose to 1342.25, the extra gain came during the position-squaring window. So, buyers didn’t gain any traction for their effort, and 1340.00-1341.00 was still being tested through the close.

Friday’s expiration is already influencing price action. If its influence intends to restrain trending, then Friday’s post-open action should not trend. Its open may gap up or down, but post-open action should range narrowly.

Not clearly recovering or rejecting 1340.00-1341.00 didn’t resolve the Wednesday expiration signal. But by the same token, not immediately extending above 1340.00-1341.00 on expiration day would suggest the range’s upper-end had held.

What’s Next… (Outlook and opportunities)
Expirations are difficult to trend at all, if not trending early. Expriations are also difficult to stop trending that begins early. So, Friday morning’s bias signal tends to persist through the noon hour. [/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.