Trading Plan for 6/13

Spain’s bailout fixed a… problem that had never been announced, not during the week. It had only been denied. So, Sunday night’s positive reaction was not really a reaction, but an action, and there was no basis for that. Friday’s intraday recovery was similar, and now it is in jeopardy.

Pattern points… (Setups and technicals)[pay]
Friday’s delay in recovering above 1305.00 meant its sponsorship was weak hands. Its complete retracement Monday proves that. Friday’s opening dip holding 1302.00 meant its sellers were weak hands. Monday’s complete retracement gives stronger sellers a chance to regain control.

There really is no bullish reason to be revisiting 1302.00, not after Friday’s test launched a rally above Thursday’s prior highs. The reversal down is likely to continue.

Another detour up would be considered back above 1311.00, targeting 1329.50‘s retest. Otherwise, Monday’s reversal already put into play 1292.00, whose break would target 1280.00.

[/pay]What’s Next… (Outlook and opportunities)[pay]
The last major downleg eventually entered a period of “hope springs eternal” rallies — very productive, albeit temporary bounces, that didn’t take very long resolving down aggressively. Unless Tuesday were to recover fresh highs, all bounces will be assumed as temporary.[/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.