Trading Plan for 6/28

[pay]About that close (How the prior session ended)
Friday afternoon’s trading range was much like the price action leading into Memorial Day. That setup also failed to exploit a short-squeeze opportunity, which confirmed the range’s upper-end was in. Friday’s recovery to the 1080.00 area was vulnerable to a squeeze, but fell to 1070.50.

Pattern points (And technical influences)
Setups that fail to form only their final element tend to have the opposite resolution. Friday’s session could have formed a Pivot Reversal, except the close was still in the process of testing the morning’s high instead of breaking above it.

Missing this one element that could have triggered a buy signal, means buyers are trapped. Gapping up Monday above Friday’s 1079.50 high would give the setup a second chance to extend higher, and also a second chance to trap more buyers.

No gap up is required at all. Friday’s probe of new intraday lows was all but required by its four previous sessions having established the tradition. The intraday recovery reflected patient sellers, which we now know because buyers didn’t gain traction.

A  lot of energy was expended in the 17-point midday rally. The decline is free to resume by breaking under 1071.00. There’s no requirement to retest Friday’s 1062.75 low. Recovering from its retest would be bullish. But a break would next target a probe under 1059.00 and then an outstanding gap at 1051.00.

Bottom line (My underlying premise)
Friday’s session had a great opportunity to trigger at least a bounce. While that still would have refueled sellers, plenty of buyers were trapped anyway. Gapping up might be credible if it isn’t quickly rejected. Otherwise, last week’s theme remains in-play, that more and more market participants are gradually realizing the trend has reversed down.[/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.