Trading Plan for 5/7

Saturday’s Strategy Session begins at 9:30am ET… its link is here, or in the Blog’s sidebar. Last week’s recording is still available at that page. We’ll discuss what is indicated by the week just ended, and possible paths for the week ahead.

Pattern points… (Setups and technicals)[pay]
Friday’s bias-up environment exit was within the noon hour’s range, and so was the last hour’s entry. Neither one predicted trending. The 3:10-3:20 window was similarly restrained. Each of these windows may suggest a likelihood for trending. But on Friday they only suggested complacency.

The result was an afternoon-long 4-hour trading range between 1363.50-1368.50. It is barely a Channel, resembling a Head & Shoulders although its alleged “head” is no higher than its “shoulders.” The ranging also resembles a Double Bottom, but its two “V” lows disqualify that interpretation in my work. Sometimes a trading range is just a cigar.

Whatever it was, or tried to be, Friday afternoon’s price action was not accumulation. And it probably was not a bottom.

More so, its second consecutive lower close under 1391.00 officially rejects the gaps at 1393.00 and 1408.50 that were filled. The confirmation’s 1364.50 close was quite a bit removed from 1391.00. That spread is similar to the recent 1386.00 trend change’s confirmation at 1353.50. Extending down this time probably needs to extend down without delay.

[/pay]What’s Next… (Outlook and opportunities)[pay]
The two-week old attack on 1352.50‘s prior low held its 1355.00 target instead of generating a new downleg. Both should melt away easily when tested again, if tested again, if the trend is down. There is meanwhile room for a corrective bounce up to 1377.00 before suggesting the decline may be further delayed.[/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.