Trading Plan for 5/21

Three words: Saturday Strategy Session… It starts at 9:30am ET, linked here or in the sidebar. We’ll discuss the market’s next move, and what it should look like. Then I’ll offer “instant analysis” of your stock requests. Join us if you can — there is no weekend session next week.

Pattern points… (Setups and technicals)[pay]
1290.00 was put into play by closing under 1332.00, and it was met at Friday’s low. It was too late to be rejected, making the pattern likely to extend to 1260.00-1261.00.

New trend lows on a Friday afternoon already suggest lower lows to come Monday. And proving the influence of Wednesday’s bearish Expiration Indicator on Friday afternoon makes it likely also to influence Monday morning.

It is possible that Friday’s new low accelerated selling that might have happened Monday, in order to avoid the weekend’s illiquidity. If so, then Monday’s open should gap up Monday above 1305.00 or 1310.50, which would target 1332.00.

Regardless, any bounce is only temporary, and no bounce is required at all. Expirations don’t contain trend extremes, so any bounce should fail, and the trend is otherwise likely to extend down.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Mathematically, the market is only getting closer to a bottom. Even if that were 100% certain to happen within the next two days, it could happen anywhere in a wide and painful price range. Just a word of caution that there should be plenty of upside when the market does turn, so it isn’t necessary to chase the low tick. [/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.