Trading Plan for 6/27

Last Thursday’s plunge undermined… the attraction back up to last Tuesday’s high. This Tuesday’s pattern may have launched a retest. If that’s not obvious Wednesday morning, then it better be obvious Wednesday afternoon. Otherwise, another plunge may be coming.

Pattern points… (Setups and technicals)[pay]
Tuesday morning’s low was another reaction down from a failed rally attempt. One important difference was this one fulfilled its target. The same 1303.25 target put into play Monday afternoon. The same 1303.25 target the overnight action could have fulfilled.

Its reaction up caught, and extended up to 1318.00.

The bigger picture’s premise going into the morning’s drop remains unchanged coming out of it. A multi-sessioon rally may be underway, targeting a retest of last week’s 1357.00 high, and higher.

A caveat — One day does not a bottom make, especially when it did not probe under the prior day’s low. But that could speak to how the rally resolves, without preventing a rally.

Another caveat — Closing above 1315.00 would have been bullish, instead of its last-minute probe down to 1313.25. But that did not trigger a sell signal.

So long as 1312.50-1315.00 holds as support, and launches another upleg, buy signals would be credible for extending higher. Back above 1318.00 through Wednesday’s open, for instance, could marginalize sellers for the day. But not rallying through Wednesday’s open may be unable to avoid retesting 1297.25-1300.50.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Tuesday’s last-minute action dipped under 1316.00 to attack 1313.00, but still closed and settled at 1315.00. Back under 1310.25 would suggest a retest of this week’s lows in-play. Extending higher overnight through 1318.00 would be credible for extending higher, with room to absorb dips down to 1316.00.[/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.