Trading Plan for 6/28

If three days with trading negative isn’t bullish for Friday… then it must be bearish. And whichever it is, should be obvious soon after the open — especially on a Friday.

Pattern points… (Setups and technicals)[pay]
Two consecutive sessions had gapped up. Despite immediately peaking, each of their final hours had probed fresh session highs. The market’s Pavlovian response was primed for Thursday’s third consecutive gap up, which trended higher without delay.

There is something reassuring about a market that provides Pavlovian responses on cue. At least, for the first response. Eventually, a market that allows itself to be conditioned is soon lulled into complacency.

That might be where Thursday’s market left us: A third consecutive gap, immediately fulfilling its 1607.00 target at the opening print, retracing only the post-open gain through the close. Four days without touching negative territory, and a weekend’s illiquidity just hours away. What possibly could go wrong.

[/pay]What’s Next… (Outlook and opportunities)[pay]
In Thursday’s Market Wrap we discussed the lack of “lower prior highs” that leave an air pocket below, which would make worse almost any dip into negative territory under 1606.25. And being a Friday, any early strength must still outlast the open — preferably recovering at least 1616.00 — to avoid the same downward fate.[/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.