Trading Plan for 5/30
[pay]Pattern notes.
Thursday afternoon’s pullback bounced off of the ESm 1397’50 bias-up signal where a bounce up to 1400’25 formed an Ascending Triangle that reversed down into the close. But it did not probe the afternoon’s lows. The biggest problem for considering the corrective bounce as having peaked is that Thursday was its third consecutive higher close.
That’s acceptable considering one of the decline’s hallmarks was its last-minute resolutions. Of course, that requires a last-minute resolution, which in this case would be the decline’s immediate resumption at Friday’s open, and preferably moving lower overnight. I do like that the cash session’s last half-hour ranged narrowly, chipping away at support and rejecting a bounce, creating a lot of pent-up selling pressure and leaving it all on the table for Friday’s open.
If the corrective bounce has ended then Friday’s open should already be in decline at the open. That, or any initial gain should be very short-lived and quickly reverse down under Thursday afternoon’s lows. There is room down to 1393’00 before being anything more than just a retracement to refuel buyers. There is room under 1390’50 for a steep drop into the weekend.
Indicators and Internals.
MACD & RSI firmed a little at Thursday’s late lows, but they had never gotten oversold to the point where improvement would have been bullish. Meanwhile internal spreads were evenly weighted with each other, so Friday’s session isn’t obligated to reward either buyers or sellers for any relative productivity.
Friday’s opening setup.
This being a Friday, the morning’s bias is likely to persist well past the noon hour. Three econ reports will influence price action prior to the bias signal’s trigger. Two are due after the open – NAPM-Chicago at 9:45 and Consumer Sentiment at 10:00 – timing that tends to reverse or accelerate any initial trending underway.[/pay]