Trading Plan for 5/30
If Friday’s close is a new trend high… then an immediate dip next week would be only temporary before resuming the rally. An immediate reversal down doesn’t have much hope of extending, though.
Pattern points… (Setups and technicals)[pay]
Thursday’s new high close at 1918.00 makes a new durable downleg unlikely to begin this week. And if attempted already Friday, then a downleg would likely recover at least to retest Thursday’s high.
But a top can start forming anyway. Thursday afternoon’s buyers gained traction (exiting the bias environment above the noon hour’s high, and entering the final hour even higher), so some fresh high is likely. Rejecting the morning’s fresh highs and reversing down into the weekend would make the high’s retest likely to hold.
Buyers gaining traction the prior afternoon also makes an opening dip likely to recover. But not too deep of a gap down. Thursday’s closing action trended up, so gapping down under the bias environment’s 1911.00 low would form a “session-long decline” setup.
Thursday’s session was likely to probe fresh highs since Wednesday left sellers satisfied with no “unfinished business below.” But Thursday’s session left unfinished business below” at 1903.75. And there is no attraction above, like Thursday had the 1914.00 “new Globex trend extreme.”
There isn’t even untested room for noise above 1907.50, since the first session to actually trend above it already touched and held its 1918.00 room for noise. Closing above it would have established higher targets, and reacting down might have refueled. But the close held it, while RSIs diverged negatively.
Extending higher isn’t required, and it’s no longer likelier than at least a temporary dip. But trending higher isn’t invalidated, and there is no requirement to reverse down.
[/pay]What’s Next… (Outlook and opportunities)[pay]
This being a Friday, the morning’s bias is likely to persist through the noon hour. That can cut either way at new highs.[/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.