Trading Plan for 5/28
[pay]About that close (How the prior session ended)
Thursday’s open narrowly missed confirming a session-long rally because of a post-open dip. The rest of the day sure performed like one. The last hour’s session highs ticked higher into the close. The morning’s 1094.00 target held multiple intraday resistance tests, and wasn’t exceeded in time to confirm a breakout. Again, that didn’t stop the last 15 minutes from performing like one.
Pattern points (And technical influences)
The potential above the week’s highs was a test of May 19’s “higher prior lows” beginning at 1103.00. That was Thursday’s last-minute high, coming late enough to avoid being rejected. Reversing down from a higher high at 1107.00 Friday would leave no unfinished business above.
Being a Friday, it is difficult to reverse early trending. Early higher highs would have more potential to test May 19’s 1109.75 and 1113.00 futures and cash session closes (respectively). That said, neither one requires a retest. But their test(s) would require a rejection by closing back under a prior low. Otherwise, a much more substantial corrective rally would be underway.
Thursday’s late surge came too late to be a valid breakout. But not for lack of trying. The 3:10-3:20 window’s rejection of probing prior highs narrowly avoided gaining traction on a reversal. Gapping down Friday under 1093.00 would end the rally effort. Extending down under 1087.50 would reverse the recovery from Tuesday and Wednesday, and reinstate their retests.
Bottom line (My underlying premise)
Speaking of which, gaps outstanding at Tuesday’s open and at Wednesday’s close require being filled. Oversold RSIs at their lows also indicate that the current rally – regardless of its size – is sponsored by weak hands. Trending down meaningfully at Friday’s open is already unlikely. But trending down at Friday’s open could find that Thursday’s higher highs came too late to gain traction, and the three-day weekend’s impending illiquidity is making up for lost time. [/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.