Trading Plan for 6/20

If Thursday failed to confirm Wednesday’s break… then can Friday still probe fresh highs, or trend up into the weekend (and out of it)? Not only is that possible, but it would provide a very reliable setup for Monday.

Pattern points… (Setups and technicals)[pay]
The market is the ultimate diplomat, satisfying multiple competing interests. Often, simultaneously. Neutralizing an interest, whether a target or a retest, can be as predictive as delaying that satisfaction. So, it is interesting that Friday’s session will be greeted with unfinished business above and below.

Outstanding above is the reward to Wednesday afternoon’s buyers for gaining traction. Thursday’s opening probe of fresh highs was in a position to reward Wednesday afternoon’s buyers, but the probe was too brief and too shallow. The afternoon’s rally was positioned to trigger a short-squeeze, but did not.

Despite owing Wednesday’s buyers the reward of probing fresh highs, and being in a position to do so, the market couldn’t muster the strength. That would have confirmed Wednesday’s breakout. Durable trends don’t miss opportunities to renew their strength and attractions.

Perhaps this rally has expiration working in its favor. The passively bullish WedEX could be influential enough. We’ll see. Thursday morning’s dip took RSIs oversold to create unfinished business below at 1944.00. Its retest has no timing element — as evidenced by Monday morning’s oversold RSIs at 1922.75 still requiring a retest. There is also the historical likelihood that the FOMC reaction will be retraced entirely within a week, as they often are.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Thursday’s close at Wednesday’s high wasn’t equilibrium, but it doesn’t qualify as trending. The late breakout and lack of follow-through suggests to me that Friday could be choppy. Only trending through the opening 15 minutes of volatility would signal otherwise.[/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.