Trading Plan for 6/30

If the rally wanted to entrench itself… then a new high close on Friday would have been smart. Instead, now a new high close would neutralize the outstanding requirement without creating a new one to take its place.

Pattern points… (Setups and technicals)[pay]
Friday’s choppiness was certainly in-line with the session’s characteristics for not trending, while also reflecting the wide disparity of opinion.Once again, not until the final half-hour were fresh highs probed. That’s not the stuff of strong handed buyers. But a short requires either breaking under support or else a failed probe above prior highs.

There isn’t much time for the latter scenario, so breaking under support is the likelier path down, if there is a path down this week at all. Participation and volume will begin evaporating Wednesday morning or sooner. That leaves insufficient time to both probe a fresh high and also to reject it. Start trending down at or near Monday’s open, or else the ranging will persist.

That ranging would likely probe fresh highs, which would be vulnerable to extending higher as participation evaporates ahead of the three-day holiday weekend. Perhaps for being somewhat of a subset of each other, trend extremes tend not to appear on Fridays, expirations and holidays. So, not trending down early Monday could give the rally free reign into the following week.

Still, Thursday and Friday both had opportunities to probe fresh highs. And did not. If for no other reason, the potential for a downleg Monday remains very much alive. And there are other reasons, as well.

[/pay]What’s Next… (Outlook and opportunities)[pay]
There is no Saturday Strategy Session this weekend. We’ll do a bigger picture Monday morning after getting through the open. As always, don’t hesitate to request a chart analysis of any stock of interest.[/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.