Trading Plan for 6/26

If Tuesday’s session intended to be a refreshing pause… then sellers are fully refueled and ready to retake control. But as a prelude to recovery, Tuesday’s session offered only optimism, “ineffectual optimism” that will turn very sour with any delay in extending higher.

Pattern points… (Setups and technicals)[pay]
Tuesday morning’s attempt to probe above Monday’s 1580.25 high was prevented by… Tuesday morning’s attempt to probe above Monday’s high. Buyers got ahead of themselves at the open, which required dipping back to a new starting point at 1570.00, and trying again.

Probes of fresh highs each failed quickly, gaining no traction, but their reversals also gained no traction. Entering the final hour under those prior highs confirmed the probes were not sponsored by strong hands. But again, sellers weren’t retaking control.

Ultimately, the vulnerability to probing higher highs was exploited to test 1584.75 and 1586.75 bias-up targets. Not being sponsored by weak hands, the probe quickly reacted back down under prior highs to 1581.75. A hold-short was avoided by not also extending back under the last relative low at 1580.00.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Tuesday’s range formed an Ascending Triangle with a false breakout (see image above). Buyers gained no traction, so extending higher Wednesday would require gapping up above its late high. Its late high could be retested before extending down. But since sellers also gained no traction, Wednesday’s open probably needs to gap down under Tuesday’s lows if the decline intends to resume.[/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.