Trading Plan for 6/6

[pay]Pattern notes.
The ESm 1393’00-1394’00 buy signal produced a rally that probed the 1400’50 bias-up target by 4 points into and out of Thursday’s close. The gap back to last Friday’s close was filled, and exceeded. Friday afternoon’s highs were touched, but not Friday morning’s 1407’00 high. It can be probed up to 1409’00 before begin considered more than a retest. And it likely will be probed up to 1409’00 so long as pullbacks hold 1403’00 as support.

Thursday’s 28-point rally already seems excessively optimistic ahead of so weighty an event as Friday’s Employment report. That doesn’t mean more excess optimism can’t be added. If anything, a higher high is more likely, and so is a recovery from reacting down about 10 points on the news. But a test of 1409’00 would either stretch the rubber band tightly enough to snap back down, or else break it on the way to sharply higher highs.

A close above 1409’00 would go a long way to avoiding any near-term drop down to 1335’00. It might produce a retest of May’s highs, or else higher. I will address that in the charting room if a higher close appears likely Friday afternoon. Otherwise, any more than a 10-point closing loss would maintain the description of Thursday’s rally as being only a bear market bounce.

Indicators and Internals.
Thursday’s 1393’00-1394’00 buy signal triggered before the afternoon’s 1390’25 low could be retested. That’s sort of a requirement since 3-minute RSI was oversold when the low printed. The retest is only “sort of” required because it can be overcome by stronger sentiment in the opposite direction – that’s just unusual.

Friday’s opening setup.
Friday’s pre-open Employment Situation report will be followed by Wholesale Trade 30 minutes after the open. The timing tends to reverse or else accelerate any initial trending. This being a Friday, the morning’s bias signal is likely to persist well into the afternoon. I will update parameters after the Employment report.[/pay]