Trading Plan for 5/3

Don’t get too excited… Taking Bin Laden out of the game has only created a temporary opening at the top. Speaking of top, Monday’s highs held some meaningful resistance. So, as for that rally on Bin Laden’s death? Don’t get too excited.[pay]

Pattern points… (Setups and technicals)
Sunday night’s 1373.50 high was in reaction to news. Despite being a “new Globex trend extreme,” it does not require a retest. Potential for its retest remains alive so long as its last relative low holds as support.

Its last relative low is Friday afternoon’s dip to 1357.50. It held Monday’s noon hour low, and it barely held Monday’s last hour low. That’s not a buy signal, but it does undermine sellers. Any potential to rally at all could retest Sunday night’s 1373.50 high.

Meanwhile, three more timing windows Monday tested 1358.75, after each of Friday’s timing windows had. It wasn’t recovered at Monday’s close, so its break could extend down to 1351.75.

What’s Next… (Outlook and opportunities)
Gapping up Tuesday or immediately recovering 1361.25-1362.00 would sequence a retest of Sunday night’s 1373.50 high before testing 1351.75. Closing under 1351.75 could take 1373.50‘s retest out of the sequence altogether.[/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.