Trading Plan for 6/11

[pay]Pattern notes.
The extended sell-off into Wednesday’s Beige Book discounted more pessimism than the news could justify. A bounce was slow to begin, but it targeted 934’00-936’00 (basis Sep). There was an extra dip under my 826’00 pullback limit, but eventually the bounce target was tested thoroughly.

Turnabout is fair-play. The slide into Beige Book’s news found sellers over-extended at 923’00. The last bounce put the market in a similar position as at the low – having fully discounted optimism. The bounce’s target was calculated from swing measurements, so perhaps it’s only coincidental that it retraced all of the last downleg, and no more.

The Gotcha! setup already warned that bounces are being used by big money to distribute. A bounce has been rejected every day this week. Wednesday’s late bounce offers another opportunity to show that buying pressure is thin. The failed opening surge routine has gotten kind of old, so an opening dip Thursday would be credible for extending down.

Not immediately declining at Thursday’s open should trade higher, and not flat. A new downleg has been stymied by only one remaining element, which is to actually close under support. Another down day Wednesday’s might be sel-explanatory.

Indicators and Internals.
Technicals improved only grudgingly into Wednesday’s closing bounce. In some instances they diverged negatively. There has been no reward for the sponsorship that is responsible for the technical situation, and there is no outstanding target above.

Thursday’s opportunities.
Jobless Claims highlights the morning’s econ reports. Wednesday’s close was mid-range for the week, but an immediate drop back under the afternoon’s ~923’00 lows would put aside any news and other sideshows in favor of unbridled selling. Otherwise, the ranging might yet include a retest of recent highs.[/pay]