Trading Plan for 6/6

If the market intends to rally out of Friday’s report… then satisfying all available selling pressure before then can only help. Right? Actually, resolving all selling pressure, and still reacting back up above resistance before the report. Buyers would be inhibited by a decline to new lows into the weekend.

Pattern points… (Setups and technicals)[pay]
A new predictive element appeared late Wednesday morning at 1614.75-1616.25. Entering and exiting the noon hour under the range has precluded the market from rallying into Friday’s Employment Situation report. Rallying anyway into the report would be likely to fail. Miserably.

More likely is that the current decline extend down sharply, further discounting a worst case scenario. This probably gets to 1590.00. Probably before the report. If only attacked by then, or if tested without yet reacting up, the report could trigger a break to even sharper lower lows..

Meanwhile, the gap back to the month-old 1606.50 opening print was retested Wednesday afternoon. Its influence on intraday action was obvious, but it has no relevance to the close. Much more relevant is something otherwise wholly irrelevant, and that is the poetic justice of completely retracing the interim rally.[/pay]What’s Next… (Outlook and opportunities)[pay]
The 3-minute RSI at Wednesday’s 1605.50 low was only on the cusp of being oversold, so its retest isn’t required, only likely. Not already resolving down while leaving unfinished business below did almost qualify for a hold-short setup. Its one problem is the potential for an interim corrective bounce. But extending the decline under Wednesday’s lows at any time should behave aggressively for what is already a delay.[/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.