Trading Plan for 6/25

[pay]About that close (How the prior session ended)
New session lows were probed through the 3:10-3:20 timing window. Buyers were marginalized for the day, and a short-squeeze would be impossible. But the dropping was done. A last-minute spike up ended under the morning’s low, so sellers gained traction for their efforts.

Pattern points (And technical influences)
Futures extended higher after the cash session close, but it was too late. Sellers gained traction. And they’ve yet to be rewarded for controlling the 3:10-3:20 window, other than marginalizing buyers. Meanwhile, the 1066.50 afternoon low’s oversold RSIs requires its retest.

Four consecutive sessions of lower intraday lows tend to produce a fifth. That doesn’t mean new lows Friday would extend down. A big target lies just under 1059.00, and probing it early enough would leave plenty of time for a short-squeeze. Avoiding new lows in the morning could reverse down with a vengeance before the close.

Friday might buck tradition and avoid new lows altogether. After all, this week’s drop has already retraced a healthy 61.8% of the two-week long rally. And since any bounce would only refuel sellers for next week, the decline would only be served.

Bottom line (My underlying premise)
My premise has been that market participants are gradually realizing that the trend has reversed down. Despite spending all of Thursday in negative territory and closing at fresh lows, there was no mad rush for the exits. A bounce to fatten up prices isn’t needed to refuel or to attract sellers when so much has been so controlled. If a drop isn’t avoided Friday then it can get ugly, and an ugly Friday would lead to an uglier Monday.[/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.