Trading Plan for 5/4

Choppy, choppy, choppy… Tuesday’s opening range had already signaled the session’s intention to be volatile. The adherence to negative territory was surprising. But it wasn’t necessarily bearish, since the overnight and morning’s lows held as support through the close.[pay]

Pattern points… (Setups and technicals)
The afternoon’s 1345.75 low was recovered up to 1353.50. That represents yet another test of 1351.75, and almost another recovery of 1353.50. Closing above 1353.50 would have been bullish. Not closing above it was not bearish.

Closing above 1353.50 would have put into play the next higher objectives at 1358.75 and 1361.50. The latter objective is Tuesday’s morning’s bias-up signal, which is “unfinished business above” that requires an eventual test.

Note the nearby chart of Tuesday’s price action, which shows the close still in the process of testing the morning’s lows. Overnight lows (not shown) held as support, but this wasn’t decisive enough to label the session as “ineffectual pessimism.” But Tuesday’s low could still hold a retest as support if timed appropriately.

Not having put into play the next higher objectives, there is exposure to resuming the decline. Since Tuesday’s final action trended up, and since the afternoon’s 1345.75 low preceded the last hour, gapping down under 1345.75 would signal a session-long decline.

What’s Next… (Outlook and opportunities)
If Tuesday afternoon’s bounce bleeds into Wednesday, then any pullback shold be limited to overnight. And any overnight pullback should be limited to 1349.00-1350.00. Under 1348.50 would resume the decline.[/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.