Trading Plan for 5/25

Another day, another dive recovered… from under 1312.50. That can be bullish — if it is exploited before buyers run out of energy to absorb another dip.

Pattern points… (Setups and technicals)[pay]
Four of Thursday’s opening hour checkpoints each overlapped 1317.00, the equivalent to Wednesday’s cash session close. This market did not want to trend. Attempts to trend intraday were returned to 1317.00, as last as the last hour.

But what matters most is the close. And Thursday was the third consecutive close back above 1312.50 after probing below it intraday. Buyers deserve a reward for absorbing the dips.

Oh, wait. Buyers already rewarded themselves.

That buying pressure could have remained pent-up overnight to help resume the rally Friday. But the last half-hour’s surge through 1312.50 extended 7 points to 1319.25 into the cash session close, and another 4 points to 1323.25 into the futures close.

Despite Thursday’s premature surge, there remains potential for extending the corrective bounce to 1332.00. But extending the bounce should not require another save from under 1312.50.

[/pay]What’s Next… (Outlook and opportunities)[pay]
This being a Friday, the morning’s bias is likely to persist through the noon hour. This being a 3-day weekend, liquidity is likely to evaporate quickly after mid-morning, which is not conducive to trading.[/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.