Trading Plan for 6/13

If Wednesday’s drop did not resume last week’s decline… then it should be obvious at the open. Even the most bearish scenario could still bounce, but only so much of a bounce can be tolerated at this stage.

Pattern points… (Setups and technicals)[pay]
Wednesday’s drop is a gateway, either to resuming the decline to new lows, or to another sizable bounce. So much selling pressure was expended that either its sponsorship is now rewarded, or else they will be trapped.

The bias environment exit and final hour entry each probed under the noon hour’s 1614.00 low. The 3:10-3:20 window trended down too, expending even more energy, while gaining traction for the effort. Pessimism was being productive, as sellers were attracting reinforcements.

Even a last-minute bounce to 1615.00 was reversed to fresh lows at 1609.50.

But that didn’t qualify for a hold-short setup. The primary concern is the reaction down from 1615.00 did not reverse deeply enough soon enough (under 1613.00). The late bearish setup fulfilled its fresh low objective, but not necessarily sponsored by strong hands.

Nevertheless, the decline gets a benefit of the doubt, so long as 1615.00 isn’t recovered. The next lower support is 1607.00 and 1604.00. Any lower through a relevant timing window would make it only a formality to probe last week’s low down to 1585.00-1590.00.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Having trended down into Tuesday’s close, recovering the afternoon bias environment’s 1621.25 high through the opening 15 minutes of volatility would trigger a “session-long rally.” We’ll discuss that intraday if its trigger is imminent.[/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.