Trading Plan for 5/3

Tuesday afternoon’s drop resumed… Tuesday night, into Wednesday morning. Wednesday’s morning’s drop hasn’t yet resumed, but its recovery stalled Wednesday afternoon. If the hesitation wasn’t constructive pessimism ahead of Thursday’s Jobless Claims, then resuming the drop could last through Friday morning…

Pattern points… (Setups and technicals)[pay]
Wednesday afternoon’s buyers were late, easily absorbed, or non-existent. The bias environment was exited above the noon hour’s 1398.00 high, but only momentarily. A quick reaction down remained under 1398.00 going into the session’s last hour. That action suggested the rally might not resume.

One more timing window could have behaved bullishly — probing above the bis environment’s 1399.50 high through 3:10-3:20. Hardly. The bias environment’s 1395.00 low was tested, instead.

A momentary surge back to the 1399.50 high proved irrelevant. More important was the entire afternoon having ranged around its 1397.00 bias-up signal. Buyers gained no traction for their efforts, despite rallying off of the morning’s 1391.00 target.

But since no new attack on the 1391.00 target gained traction, sellers did not regain traction. Buyers gained no traction either, so resuming Wednesday’s recovery attempt must begin by gapping up. Resuming the decline must simply probe new lows.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Only one sell signal triggered Wednesday, which was already less than optimal, and it was quickly invalidated. Almost any further upside should begin aggressively to compensate for the delay. Any weaker origin to probing 1401.00 or 1404.00 would be extra vulnerable to reversing back down. [/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.