Trading Plan for 6/3
If Monday’s late dip to support really held… then why did its reaction up only test session highs? The afternoon’s earlier bounce had only touched the morning’s high before reversing down. That reversal only touched the noon hour’s low before recovering. That recovery speaks volumes.
Pattern points… (Setups and technicals)[pay]
It is in that recovery from the afternoon dip that we get a glimpse of the character of buyers. That late bounce returned to highs that had been tested twice already. Either their resistance was chipped away, or it is solid resistance.
And the bounce originated from touching a relevant low. Either the low could launch a break above resistance, or it wasn’t finished being tested. Strong-handed buyers would have exploited the late fresh high to trigger a squeeze. Weak-handed sellers would have been squeezed.
Instead the close settled back into the range. And although the morning’s recovery wasn’t retraced, neither was it exploited. All of that energy was expended, only to close back at Friday’s highs.
The overnight “new Globex trend extreme” at 1924.25 wasn’t complex, so it doesn’t require intraday retest, but its retest isn’t forbidden. Meanwhile, oversold RSIs at Monday’s 1913.75 low does require a retest. Hopefully, the dueling attractions will inject volatility into Tuesday’s action — Monday’s last three consecutive timing windows almost all overlapped each other, so have some errands in mind if Tuesday’s open suggests that will be repeated.
[/pay]What’s Next… (Outlook and opportunities)[pay]
Friday’s new high close required at least one more higher close. Monday’s 1923.00 close qualifies, being above even Friday’s 1922.25 last-minute high. It is not optimal, because its leg — each of Monday afternoon’s legs — was overlapping Friday’s high. But any hesitation extending higher Tuesday remains vulnerable to beginning a multi-session decline… A decline that leaves no unfinished business above.[/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.