Trading Plan for 6/2

[pay]About that close (How the prior session ended)
Support at 1082.00-1083.00 finally gave way into Tuesday’s close. There was no requirement to compensate for the break’s delay, but selling was severe nonetheless. The break eventually probed the pre-open low by 2 ticks down to 1068.50. All following an interim rally to 1094.50.

Pattern points (And technical influences)
Oversold RSIs at the last-minute low introduce a vulnerability to bounce, whose objective might be 1075.00-1077.00. But a bounce isn’t required, because oversold RSIs attract weak hands, and weak hands aren’t participating so late in the day.

Also, recall that there was room down to 1070.00 Tuesday without sellers gaining traction. Tuesday’s close was still in the process of testing 1070.00. Now there is room for noise around 1070.00 down to the gap at last Wednesday’s 1061.00 close. The gap at last Wednesday’s cash session close equates to 1066.25, and could also offer support.

A test of prior lows – 1066.25/1061.00, 1046.00, 1036.75 – is probably a downleg on the way to new lows, and not a Double Bottom. First things, first. There is no unfinished business above, so there should be little or no delay in resuming the decline. Not resuming the decline at Wednesday’s open would suggest another run at last week’s highs.

Bottom line (My underlying premise)
Wide ranges, failed intraday rallies, closing under support. This action is still distributive, and is creating more pent-up selling pressure than it satisfies. The burden of proof is on buyers, because sellers otherwise continue to get a benefit of the doubt. [/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.