Trading Plan for 5/20

If the bullish WedEx indicator remains valid… then Monday morning’s bias should be obvious by now. But Monday’s opening print is actually less predictable than its reaction.

Pattern points… (Setups and technicals)[pay]
The bullish WedEx indicator seems to have identified the expiration bias. Keep in mind that its influence also applies to Monday morning. Typically, one of those windows is noticeably more aggressive than the other.

Also keep in mind that Monday’s open isn’t immune to gapping down — the bullish WedEx would likely facilitate its recovery from the opening tick, but that opening tick could be anywhere.

And then comes Monday afternoon.

WedEx’s influence will have lapsed. Although a new trend high close on Friday is unlikely to be THE trend’s high close, that doesn’t prevent a multi-session interim decline.

The next higher targets upon breaking out of 1627.25‘s orbit were 1654.50 and 1671.75. I’m adjusting that down 2 ticks to 1671.25. Regardless, its test isn’t needed before sellers can mount a serious effort to retake control. But testing it first would make that effort more serious.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Don’t forget to join us this weekend for the Saturday Strategy Session at 9:30am ET. Its link is found in the blog’s sidebar. We’ll discuss the current patterns in greater detail, and describe likely scenarios for Sunday night and Monday morning. Also, it’s a great time for instant analysis of any stocks that currently interest you.[/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.