Trading Plan for 6/14

[pay]About that close (How the prior session ended)
The least predictable window of the week is Friday’s last hour. Occasionally it is entirely predictable, when preceded by intraday trending. Friday had not trended at all. Price action had all but stagnated, and price was sitting in the middle of the range. The last hour’s 10-point surge probed fresh highs, but it originated too late to be durable.

Pattern points (And technical influences)
Closing at fresh highs doesn’t equate to being a breakout, not without first recovering from a reaction’s dip. Until then, the prior high is still in the process of being tested. Futures dipping after the cash session close doesn’t qualify, despite touching the morning’s high.

Extending higher Monday morning would only stretch the rubber band tighter, preventing a higher close from confirming Friday’s breakout attempt. Anyway, Friday breakout’s rarely do confirm, although the following Monday does often try. That’s why an opening dip (though unlikely) would likely recover, but ultimately close negative on the day.

The bigger picture hasn’t changed. I don’t consider weeks of ranging around May 6’s “flash crash” low as basing to launch a new rally leg. Friday’s 13-point plunge in reaction to the Retail Sales report was recovered immediately, and had the right to rally throughout the morning. It didn’t.

This bearish assessment can be overcome. It can be done the hard way, or it can be done the harder way. The hard way is to gap up above June 3’s 1100.75  prior high (dotted green line). This would be bullish because Friday touched and held June 3’s 1086.75 “higher prior low” (solid red line). The harder way would work its way higher to close only above 1092.75, putting into play a test of 1100.75 – but not necessarily its recovery.

Bottom line (My underlying premise)
Basing, or not, plenty of unfinished business below remains outstanding. From last week’s gaps (circled red) to May 25’s “new Globex trend extreme” (not shown). But unless Monday’s open immediately rejects Friday’s last-minute surge, those attractions below will have to wait for another day. Like Tuesday. Or Wednesday.[/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.