Trading Plan for 6/11

If Tuesday’s late surge had surged earlier… then the session might have produced the one outstanding new high close the pattern requires.

Pattern points… (Setups and technicals)[pay]
Tuesday’s gap down held 1946.00 to avoid forming a “session-long decline” setup. That didn’t prevent the morning from probing lower to 1943.00. But gapping down, and spending the entire session in negative territory, avoided trending down. It was almost “ineffectual pessimism.” Almost

Ineffectual pessimism also would have probed fresh lows during the afternoon. Recovering was easier, since sellers didn’t expend much more energy. Regardless, selling pressure was absorbed, but only for returning to unchanged, and not to produce a recovery.

That’s pretty close to being ineffectual pessimism. And that makes rallying likelier, at least to retest the origin of the drop — Monday’s 1954.75 mid-day high. Having rallied into Tuesday’s close, gapping down under the afternoon’s 1945.25 low would trigger a session-long decline. Only teasing it could be bullish.

[/pay]What’s Next… (Outlook and opportunities)[pay]
This market has a “Wednesday Wreversal” written all over it. That happens when trending in the morning seems pretty productive, but reverses more substantially in the opposite direction into the afternoon. That’s tough to square with Friday’s new trend extreme close still requiring a new trend extreme close, unless a reversal down were recovered after several days.[/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.