Trading Plan for 5/24

If Friday’s open isn’t gapping… then would aggressive sponsorship be any likelier to appear later in the morning? Probably not. Early aggressive trending would still be vulnerable to reversing direction intraday. But not trending early would be vulnerable to not trending at all intraday.

Pattern points… (Setups and technicals)[pay]
Thursday morning’s corrective bounce potential was camouflaged. Rather than open flat with Wednesday’s close, or around it, the post-open bounce came from sharply lower levels. Sharply lower levels that were probed thoroughly overnight, and then again after the post-open bounce.

Let’s call that 1637.00, plus or minus.

Higher highs during the afternoon tried repeatedly to probe above resistance. Let’s call that other end of the spectrum 1651.00, also plus or minus.

Thursday offered equal opportunity to expend all available selling pressure, and all available buying pressure. First, a test of “lower prior highs” was only attempted, and only overnight. Then, multiple resistance levels were tested from below — from “higher prior lows.” to gaps, and also targets of Wednesday’s decline. All held.

Trending is difficult ahead of a three-day holiday weekend. Counter-trending is easier. Aggressive trending at Friday’s open could reverse through the afternoon if relevant resistance or support were met early enough. A slower start would still be able to extend, but less likely to reverse intraday.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Gaps cannot be discounted. An opening gap is almost required Friday, since Thursday afternoon didn’t improve upon the morning’s rally — gapping would compensate for having delayed the resolution. So, not gapping beyond Thursday afternoon’s range could be an early indication of a range-bound session.[/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.