Trading Plan for 5/22

If Wednesday’s open hadn’t surged… then would the afternoon have attacked last week’s highs? Maybe only the consolidation that had followed the highs, but a pretty productive rally anyway. So, did Wednesday afternoon hesitate due to strong-handed patience, or is there an attraction below that must be visited?

Pattern points… (Setups and technicals)[pay]
Wednesday afternoon’s buyers gained traction. The final hour was entered just above the bias environment’s high (the high prior to the FOMC reaction’s surge to 1885.00). And the 3:10-3:20 timing window trended up to fresh highs.

But it seems a little repressed that the afternoon’s high was only 3 points above the morning’s high. Perhaps the morning’s surge used up too much buying pressure. Closing higher, nonetheless, still reflects strength.

With the afternoon’s 1887.50 bias-up target outstanding, and buyers gaining traction, a hold-long would not have been inappropriate. But the repressed afternoon strength raised the concern for an overnight refueling dip. Regardless, extending higher would target new highs.

[/pay]What’s Next… (Outlook and opportunities)[pay]
With or without a refueling dip, extending the rally Thursday should somewhat duplicate Wednesday’s open above 1874.00-1875.00 which extended higher aggressively. A shallow opening dip would still likely recover. Perhaps the only path down is to gap under Wednesday afternoon’s 1879.00 low — having trended up into the close, that would trigger a session-long decline setup.[/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.