Trading Plan for 5/22

Day-one of an upcrash? Or… was Monday’s 25-point rally the corrective bounce of an ongoing decline. Regardless, there is unfinished business below at Friday’s 1292.50 and 1290.25 cash session and futures session closes, not to mention Sunday night’s 1287.25 “new Globex trend extreme.” And now a lot of buying pressure has now been expended.

Pattern points… (Setups and technicals)[pay]
Monday’s gap up was not above Friday afternoon’s high, making the session-long rally unusual. But the rally was due to sellers not retaking control, and not from buyers gaining traction. Both bias signals were triggered last-minute or later.

I over-estimated the depth of Monday morning’s false break lower, which prevented participating much earlier in the rally. But that also speaks to the impatient buying that limited pullbacks.

Anyway, the afternoon’s 1312.50 bias-up target was eventually tested to the 1315.50 upper-end of its noise range. But not until after the close. And that was too late to be rejected, and to signal momentum reversing back down. It was also too late to signal that Monday’s buyers gained traction for their efforts.

But it was enough for the burden of proof to be more so on sellers. Extending higher Tuesday could potentially test 1332.00. Attempting to resume the decline would have to negotiate 1304.50-1306.50 support before assuming a retest of the lows was underway.

[/pay]What’s Next… (Outlook and opportunities)[pay]
As with Monday’s open, sellers not gaining traction through the open could prevent them from gaining traction until much higher levels. Even then, dips could prove to be no more than refueling buyers unless relevant support were broken through relevant timing windows.[/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.