Trading Plan for 5/20

If expiration’s influence is the only bullish influence… then what held price aloft through Monday afternoon? WedEX didn’t trigger on time to be reliably predictive. And now its 1885.00 un-triggered signal is being attacked. The market seems intent upon retesting it, but can it be exceeded?

Pattern points… (Setups and technicals)[pay]
A retest of last week’s 1898.50 highs could be fulfilled within days, if not within hours. Monday’s ~1882.00 close isn’t that close, but neither is it that far away. Just one requirement: the recovery from Thursday’s 1859.00 low can’t afford to hesitate.

Monday’s 1883.00 high is a 61.8% retracement of the 1898.50-1859.00 sell-off. That could retrace to 1874.00-1875.00 without yet reversing momentum down. However, recall that in this weekend’s Saturday Strategy Session I this particular leg the “Satchel Paige setup,” because it can’t afford to look back and see what might be gaining on it. Taking time to patiently back-and-fill would more be more vulnerable to extending back to Thursday’s low.

Monday afternoon’s buyers gained no traction for their efforts, despite firming and closing at session highs. The bias environment’s exit and final hour’s entry both were within the noon hour’s range. Fresh highs weren’t probed until the last half-hour. So, avoiding a corrective dip the next morning and extending higher without delay requires gapping up. And maintaining the gap up.

[/pay]What’s Next… (Outlook and opportunities)[pay]
So, extending higher to retest 1898.50 (presumably up to 1902-1907.00) without a corrective dip must maintain a gap up. But a corrective dip to 1874.00-1875.00 would be vulnerable to retracing all of the recovery from Thursday’s 1859.00 low. Monday’s 1882.00 close isn’t necessarily “between” between a rock and a hard place, but it is equidistant from each. [/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.