Trading Plan for 6/18

Did the market just signal… a detour from its unfinished business below? We’ll discuss that in detail during the weekly Saturday Strategy Session. It begins at 9:30am, and its link can be found in the blog’s sidebar.

Pattern points… (Setups and technicals)[pay]
Fridays are difficult enough to get trending started. They’re notoriously difficult to reverse trending underway. Friday’s gap up never really turned negative, and every relevant timing window avoided being entered under a relevant low, so all ties were won by higher prices.

The action leaves two big questions.

First, did the rally finally complete a bounce? Relevant resistance was met, and held. The cash session close held 1335.25 resistance, which was the afternoon’s bias-up target a 61.8% retracement into last Sunday night’s initial ranging (recall that Sunday night’s open gapped up and ranged sideways before falling). Not closing above it means no higher target was put into play.

So, extending even a millimeter higher would all but signal triggering a new rally leg.

Second, is Wednesday’s bearish Expiration Indicator relevant? It is certainly vulnerable to inverting, especially if its sponsorship is blind-sided by contrary events. That’s a cop-out. Perhaps that possibility would be considered if the signal had been actively bearish instead of passively, i.e. closing under relevant support Wednesday, instead of holding a test of resistance.

Suffice it to say, if Monday morning’s action were to tumble precipitously — presumably on news — then I would consider the bearish Expiration Indicator to have been made possible the conditions. But I would not consider the indicator predictive at this point.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Last week’s Saturday Strategy Session gamed out the potential upside patterns. We’ll revisit that this week, but also look at the downside path if sellers were to retake control.[/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.