Trading Plan for 6/6

Tuesday’s bias-up signal was… invalidated by exiting the bias environment back under it. Then despite not triggering the afternoon’s bias-up, the morning’s bias-up target was met at Tuesday afternoon’s high. That’s not a bad characterization of the session’s ongoing disconnect.

Pattern points… (Setups and technicals)[pay]
Three more useful characterizations of Tuesday’s session are its failed sell-offs, its probe of fresh highs, and those fresh highs not gaining traction.

The overnight drop from 1280.50 down to 1267.50 was recovered in time to avoid a gap down, which sellers needed to retake control. The morning probed Monday’s highs up to 1284.50. But each of the afternoon’s timing windows overlapped the morning’s 1284.50 high.

That last point wouldn’t be so relevant, if not for each of the afternoon’s timing windows also probing its own fresh high. This is distribution. It is not a sell signal.

A distributive rally can extend indefinitely. Closing Tuesday under the noon hour’s 1283.00 high would have signaled the rally’s end, but that was avoided.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Similar to Tuesday’s open, sellers could be marginalized for much of the day — and for another 10 points — if they don’t retake control through the open. Retaking control at the open could allow sellers to quickly retest this week’s 1262.00 low.[/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.