Trading Plan for 6/30

Three consecutive intraday rallies… and each one closed at its last target. Buyers gained no traction for their efforts. But that didn’t prevent new sponsorship from taking over. It’s not common, but it can happen. Extending higher for a fourth day isn’t common, either. But…[pay]

Pattern points… (Setups and technicals)
1:00-1:20 is not necessarily a bad time for a breakout to begin. But if it extends to probe a new session extreme, then retracing it by 1:20 is bad, after all. Weak hands can’t maintain a breakout that begins so late.

Wednesday’s breakout after 1:00 probed a fresh session high and retraced it by 1:20. Both the 1304.00 bias-up signal and the 1304.25 pre-open “new Globex trend extreme” held a test, too. The immediate consequence was a pullback targeting 1298.50.

Closing any lower would have triggered other, lower consequences. Recovering to close at fresh highs would have resumed the morning’s rally. While a bounce did retrace the entire drop back to its origin, Wednesday’s close did not recover above it (until after the cash session close when further gains had become irrelevant).

For a third consecutive day, let’s all say it together: Buyers gained no traction for their efforts.

A three-day holiday is approaching, so Wednesday’s close above 1293.00‘s prior highs does suggest the trend will extend into and out of the weekend. Closing Thursday back under 1293.00 – and preferably under 1287.50 – could serve by proxy as if the range’s upper-end had held its test. Otherwise, pullbacks would be absorbed, and recovered to fresh highs.

What’s Next… (Outlook and opportunities)
Gapping down under Wednesday afternoon’s 1297.00 low would trigger a “session-long decline” setup. Probing a fresh high early Thursday would still be vulnerable to reversing down, until recovering 1307.00-1310.00 through a relevant timing window. At that stage, the rally could be considered more durable than a corrective bounce. [/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.