Trading Plan for 6/2
[pay]Pattern notes.
Sunday night’s Globex open immediately attacked Friday’s last-minute low. That was only 30 minutes ago, and the initial drop has yet to break lower. But by not immediately recovering Friday’s last-minute dive, the Globex open is clearing the way for sellers to retake control. Monday’s cash session open is still 15 hours away and the clock doesn’t start ticking down until Friday’s ESm 1398’00 low is actually probed.
But of all the opportunities to reject sellers that buyers might have, they just missed one. And the Globex open was a pretty big opportunity, because immediately rejecting the last-minute dive would have tucked it away neatly in anomaly-land. I was starting to wonder myself, since the template had so clearly predicted it and yet it could not have happened any later. Until there is any evidence to the contrary, I am ascribing Friday’s delayed dive as being the product of optimism.
Indicators and Internals.
It’s not surprising after Friday’s relatively narrow ranging that internal spreads were evenly weighted. However, the relatively heavy total volume was a bit unusual. But Friday was an inside day, with all of the session’s price action contained entirely within Thursday’s range. Light volume would have made the day otherwise irrelevant. But Friday’s heavy volume, balanced internals and inside day suggest last week’s recovery attempt ended before the weekend.
Monday’s opening setup.
If the optimism of last week’s corrective bounce has peaked, then Monday’s open should gap down under Friday’s ESm 1398’00 low and extend down noticeably through 10:15. Otherwise, a gap up to the 1404’00 area will peak a little higher – perhaps as high as 1408’00 – then fail miserably. Two econ reports are due 30 minutes after the open, and Monday’s are unusual for any reports, so the oddity could easily throw a wrench in the works of any initial trending attempt.[/pay]