Trading Plan for 6/6

If Thursday’s rally didn’t already discount any enthusiasm possible from Friday’s NFP, … then the short-squeeze of the century could be unfolding. An momentary, doomed short-squeeze would appear similar at its open.

Pattern points… (Setups and technicals)[pay]
I noted earlier Thursday that the rally had taken to fulfilling new objectives almost as quickly as it was creating them. This followed the rally having tested higher attractions that weren’t actually objectives requiring a test. The market is quite literally pulling out all the stops to extend the rally.

This tends to be late-stage action. The tactic keeps alive the trend, but it doesn’t refuel. Refueling is more constructive. Recall that Monday’s steep sell-off from its opening sentiment extreme was recovered intraday. That would have helped the rally to endure.

Not that the rally can’t extend. Thursday’s new high close is not a sell signal. But the buyers didn’t gain traction for their efforts, despite the afternoon bias environment’s fresh high. Maintaining a gap up through Friday’s open would likely trend up safely into the weekend. The only other potentially bullish scenario would bounce from gapping down.

[/pay]What’s Next… (Outlook and opportunities)[pay]
What might trigger a gap down Friday? The same thing that paralyzed Thursday afternoon with anxiousness. The pre-open Employment Situation report, which appears solo for the day. A centrist Fed speaker does have a pre-open talk overseas.[/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.