Trading Plan for 6/15

Tuesday’s Pivot Reversal was unfinished… so extending higher without further delay required a gap up. The gap up also reflects impatient buyers, which is not bullish coming so close to the low.[pay]

Pattern points… (Setups and technicals)
Tuesday afternoon’s 1284.50 bias-up signal put into play 1290.00. The bias environment exit dipped back down to 1284.50, then bounced instead of breaking lower. That is bullish action. In fact, its bounce printed a fresh high at 1287.00.

The fresh high was printed going into the last hour. That action is also bullish. And, of course, it avoided a drop back under 1284.50 long enough to validate its 1290.00 target. Now 1290.00 is “unfinished business above” whose eventual test is required.

“Bullish” does not prevent a drop. It indicates that strong hands were not sellers. Sponsorship of a later drop should be limited to weak hands. That should limit the drop, and enable its recovery.

We’ll see.

The last hour’s 6-point drop fulfilled its potential to 1281.50-1282.00, which held through the close to confirm its sponsorship was weak hands. Recovering 1283.25 through the close would have confirmed the drop had ended. That proof must be left to Wednesday’s open, whether by extending the rally, or by absorbing another dip.

What’s Next… (Outlook and opportunities)
Assuming a bullish context, and that Tuesday’s late drop will recover to fresh highs, there is still no assurance of that evolving into a durable rally. The more bullish path – at least, for the purpose of delaying new lows – would be another shallow dip at Wednesday’s open. [/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.