Trading Plan for 5/28

If Friday’s early drop actually trapped shorts… then Friday afternoon’s highs should have recovered positive territory. And the recovery should have accelerated and extended at least once, if not twice. But it only firmed back toward Thursday’s highs, forming an “inside day” — probably delaying the fireworks until more are available to participate.

Pattern points… (Setups and technicals)[pay]
Friday’s “inside day” means nothing to the bigger picture. And it means everything.

It means nothing because Friday trending is often contrary to the ultimate resolution. Extending the open’s drop under Wednesday’s 1634.50 low would have been productive — if it had extended lower during the morning. Anything later when volume has tapered off is probably not sponsored by strong hands.

At the same time, Friday’s inside day means everything. The market could have dealt shorts a devastating blow by trapping shorts with a later dip under 1634.50. But the opportunity was not exploited. More so, much of the session was spent firming, instead. And more more so, the firming gained no traction for the effort.

No traction was gained for firming back to only 1643.00 at noon, back to 1646.00 at 1:20-1:30, or to 1648.00 during the bias environment. All the while, the rubber band was being stretched more tightly.

None of which requires the decline to being without delay. But Friday morning’s temporary selling effort and its unproductive buying effort still suggest that the decline’s eventual resumption will be aggressive. Gapping up sharply could would be the only path higher, and trending down sharply is the only path lower, when intraday buying gains no traction.

[/pay]What’s Next… (Outlook and opportunities)[pay]
This being a holiday weekend, there is no Saturday Strategy Session. Have a very safe and happy holiday![/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.