Trading Plan for 6/17

If Friday’s decline is only temporary… then can it resume without delay Monday? Yes, but not very strongly — not unless by gapping up on much stronger sponsorship. Otherwise, strong sellers aren’t needed to extend Friday’s decline.

Pattern points… (Setups and technicals)[pay]
Was the latter half of Thursday’s rally less artificial? It was the product of sellers becoming marginalized that morning. But it still created the likelihood for probing fresh highs before failing.

Actually, it did probe a fresh high Friday before failing. But the fresh high was nominal. And the failing was pretty aggressive for a no-bias environment. Yet the failure was pretty productive.

Friday’s reversal down stopped short of retracing 61.8% of Thursday’s rally. That’s too shallow to reject the rally, or to correct it. Extending higher without delay Monday shouldn’t be very productive or durable. Reversing down further Monday would risk gaining traction to resume the original decline.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Try to join us this weekend for the Saturday Strategy Session. It’s at 9:30am ET, linked from the blog’s sidebar. We’ll discuss the bigger picture and individual setups, along with expectations for the next week’s open. And you can request instant analysis of stock charts.[/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.