Trading Plan for 6/1
[pay]About that close (How the prior session ended)
Friday’s round trip from 1084.00 to 1099.50 and back again left the market where it had gapped open Thursday. Sunday night’s Globex open rallied into midnight at 1096.00, then back down again. Markets were volatile into the week’s end. They were volatile into Friday’s close. And they were volatile coming out of it. But little has changed.
Pattern points (And technical influences)
Little has changed because probes of prior highs never gained traction. Thursday’s gap up ranged sideways until too late to reflect strong sponsorship. Friday’s open left no unfinished business above. Lower lows never gained traction either, but did leave plenty of unfinished business below.
Last Tuesday’s 1036.75 “new Globex trend extreme” and 1046.00 gap open, and the gaps back down to Wednesday’s cash and futures session closes at 1066.25 and 1061.00. These anchors already held back rally efforts into the weekend.
Gapping up Tuesday above 1093.00 may be the only way to break free from their magnetic attraction. There’s still resistance at 1102.00, and it might still hold if the open doesn’t gap above it. The initial objective would be 1110.00-1113.00, and probably higher since there’s no requirement to rally at all.
Otherwise, dips have room down to the 1070.00 area before signaling a retest of last week’s lows. It wouldn’t be unusual in this pattern for new lows to be probed within two days, if not Tuesday. And there’s no requirement for the low’s to hold as support.
Bottom line (My underlying premise)
Holding prior highs is not a sell signal. But failing to exploit a probe of resistance is bearish when timing and illiquidity should have forced a squeeze higher. A gap up that isn’t immediately rejected Tuesday would get every benefit of the doubt for finally launching a corrective bounce. Until then, almost any weakness should be monitored for sellers gaining traction.
PROGRAMMING NOTE: As suspected, there was no customer support during the holiday to resolve the chartroom issue. So we’re probably stuck with the older version Tuesday morning – and it isn’t compatible with Windows 7 or Apple Mac. I apologize for the inconvenience.[/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.