Trading Plan for 5/28

If none of the multiple sell setups trigger Wednesday… then the rally must intend to extend sharply higher. And the sell setups essentially depend upon gapping down, so not gapping down could be very bullish.

Pattern points… (Setups and technicals)[pay]
Tuesday’s gap up is not a breakout, per se. Neither was Friday’s new high close, do Tuesday’s higher close is not confirmation. None of which prevents extending higher without delay.

And none of which requires it.

Retesting prior highs remained likely despite its delay during the past couple of weeks. And its retest was likely also to visit 1907.50. Now having fulfilled the long-standing target,  it is interesting that each of Tuesday’s legs overlapped 1907.50. There was no signal that momentum is extending higher.

Meanwhile, while buyers were productive, that doesn’t mean they attracted more buyers to gain traction for their earlier efforts. The afternoon bias environment was exited at the noon hour’s high, which is where the final hour was entered.

Although no sell signal would trigger while trending up into the close, a short-entry would be more sensible than holding long overnight. The target was met, without gaining traction, during a gap up that may have formed an Island. And keep in mind, this is all within the bigger picture context of a failed Ascending Triangle likely to resolve down.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Of course, we did not short the close — nor would we ever consider shorting a new high close — but that doesn’t preclude monitoring overnight action for reversing under 1905.50 or so. Having trended up into the close, a “session-long decline” setup would be triggered by gapping down Wednesday under Tuesday afternoon’s low that lies in the bias environment. All that said, there being multiple opportunities to trend back down, NOT trending down would suggest the rally is extending much higher. [/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.