Trading Plan for 6/16

Payback’s a… Oversold RSIs require a retest, and any interim rally is all about refueling sellers. An incomplete Pivot Reversal cannot launch a durable rally. Tuesday’s rally fell prey to these and other market truisms, despite the steep detour. Other truisms are pointing lower.[pay]

Pattern points… (Setups and technicals)
Ranging at Wednesday’s low was centered around 1259.00. Bounces weren’t expected to gain traction, and did not. But potential down to 1251.00-1253.00 wasn’t fulfilled. Attempts to extend down were retraced back into the range, but not back above it. That could have been bullish, but instead the delay was “ineffectual optimism.”

Extending intraday down to 1253.00 could have stretched sellers thinly enough to trigger another steep rally. It would have been a credible low, but an attack barely got underway. The delay makes 1244.00 increasingly likely, if the decline were to resume.

Wednesday’s expiration signal wasn’t decisive, despite probing fresh lows. Closing at new lows would have signaled the downtrend would extend through expiration. Recovering from fresh lows would have targeted prior highs up to 1290.00.

What’s Next… (Outlook and opportunities)
Thursday’s open can still do by proxy what Thursday’s close did not. Recovering 1264.50 would suggest the range’s lower-end held. Exiting the open at fresh lows would suggest that expiration will be tilted down. No clarity is required – and even then, it may only signal that a rally or decline will be absorbed. [/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.