Trading Plan for 6/14
Rally attempt, new lows, then another failed rally… Monday’s session had a little something for everyone. Requirements to test the morning’s high and Friday’s low were both fulfilled, while creating new requirements to test the new extremes. Tuesday could be very similar for awhile.[pay]
Pattern points… (Setups and technicals)
Both Monday’s morning and afternoon bias signals invoked their grace periods. The morning’s late bias-up never extended higher, and the afternoon signal never triggered. That only inhibited trending, not volatility.
It may have also inhibited the a Pivot Reversal from triggering with a close above the morning’s 1271.50 high. It still could trigger Tuesday, either by immediately recovering 1272.50, or by opening in rally mode after dipping to new lows overnight. A valid effort would not delay in extending sharply higher.
Oversold RSIs at Monday’s 1259.50 low require a retest, which could be fulfilled overnight. That’s probably the best chance at neutralizing the attraction below, absorbing the selling pressure, and then also rallying through the open. Otherwise, a fresh low intraday would be vulnerable to becoming a bigger decline.
Simply gapping up Tuesday above Monday afternoon’s 1271.75 high (its RSIs were overbought) would reject the closing dip. And that would trigger a Session-long Rally setup. It could also become a multi-session rally, but would leave outstanding the oversold RSIs at Monday’s low.
What’s Next… (Outlook and opportunities)
Bounces should be limited to 1270.00 if a retest of Monday’s low remains in-play. Considering overbought and oversold RSIs lie at either extreme, much of Tuesday could be choppy, like Monday. Unless the opening action were recovering above Monday’s highs, fresh lows are likely, and somewhat capable of extending the decline… Monday’s last hour and Market Wrap recording are linked here. [/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.