Trading Plan for 5/25
[pay]About that close (How the prior session ended)
Monday’s last hour quickly slid to fresh afternoon lows. The 3:10-3:20 window trend up, but failed to recover back above prior lows at 1081.00. Fresh afternoon lows were likely so long as 1081.75 wasn’t recovered. In fact, piercing 1081.75 momentarily by 1 tick triggered a 12-point plunge into the close.
Pattern points (And technical influences)
The last-minute 12-point plunge was perfectly reasonable within the parameters. But it was entirely unexpected in a session that avoided any substantial trending intraday. What little there was developed only during timing windows that prevented the trending from gaining traction.
The morning’s bounce from gapping down stayed in negative territory. The noon hour’s fresh session high was never exceeded. The afternoon’s dip came during its no-bias environment.
Even the 12-point plunge to new session lows failed to gain traction. Its low touched the 1070.00 pre-open low and stopped. Closing without touching 1070.00 would have left pent-up selling pressure. Closing under 1070.00 would have triggered lower targets.
Not that lower lows can’t be probed. In fact, the Globex open gapped down to lower lows and already probed 1065.00. The objective is a retest of Friday’s 1054.00 opening print. Gapping down to test it Tuesday morning would expend a lot of selling pressure – selling pressure that wasn’t pent-up or triggered at Monday’s close – selling pressure that could immediately lose traction upon touching the 1054.00 objective.
Bottom line (My underlying premise)
Failing to hold a retest of Friday’s low would be the product of a new downleg, and not just a temporary probe of new lows. Recovering overnight to open Tuesday back above 1080.00-1081.00 would leave the decline’s resumption for another day, and probably for another week. A heavy econ calendar Tuesday could trigger a reversal of any early trending.[/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.