Trading Plan for 6/27

The Greek plan’s knee-jerk surge… required a complete retracement according to Thursday afternoon’s pattern. Its origin was tested at Friday’s late low. Taking an entire day to complete left no time for reacting up to safer ground. The market chose otherwise, suggesting that Monday’s open will be interesting, too. [pay]

Pattern points… (Setups and technicals)
Delaying the retest of Thursday’s 1261.50 last relative low prevented a base from forming Friday. Extending down at Monday’s open is the likely resolution. So, NOT extending down immediately would be likely to bounce.

Meanwhile, the leg underway before Thursday afternoon’s surprise announcement is back in-play. A decline from 1270.75 was aiming for new session lows under 1257.25. There was already a risk of its break, which would next target 1251.00. Now that is even likelier, to compensate for the detour’s delay.

Regardless of direction, Monday’s open is likely to gap sharply. Fridays that trend at all tend to contain at least two trending legs. But Friday morning’s downleg never got a sequel. In these rare instances, Monday’s open tends to compensate for the delay.

What’s Next… (Outlook and opportunities)
Thursday’s 1257.25 low would be likelier to hold its test if tested early Monday. But bouncing before touching it would reflect optimism that would help to maintain the slide. Meanwhile, a bounce would have room up to 1271.00 without Friday’s decline losing traction. Recovering 1272.50 could gaining traction for something much bigger, like retesting Thursday’s 1286.00 overnight high.

Don’t forget to join us Saturday morning for the weekly Strategy Session. Its link is in the sidebar. We’ll go into greater detail about using Bias Parameters, and then open the floor to instant analysis requests from subscribers.[/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.