Trading Plan for 6/7

The corrective bounce potential… were tested at Wednesday at 1309.00 and 1312.00. Ultimately, they were exceeded through the close. That doesn’t mean the rally is not a correction. But it does mean the correction hasn’t ended.

Pattern points… (Setups and technicals)[pay]
Buyers didn’t lose traction through Wednesday afternoon. After probing under the noon hour’s 1307.50 low, the bias environment was exited back within the noon hour’s  range. It’s not bullish, but it it reflects sellers failing to retake control.

Then the bias environment’s 1309.00 high was still being overlapped into the session’s last hour, instead of being exceeded. While that’s not bearish, and it wasn’t definitively bullish.

New trending was likely to be attempted during the position-squaring window. It was likely to be attempted at the window’s beginning, but a surge 5 minutes later still gained a quick 7-1/2 points to 1315.00. The delay is not bullish. And 7-1/2 points is not bearish.

This is an example of, “the trend is your friend.” But timing can come between friends. So, although closing above 1312.00 has put into play 1318.00-1319.00, the timing reasons described above prevented considering it for holding long through the close. Its test is likely so long as pullbacks hold any test of 1310.00-1311.00. Back under 1309.00 would undermine Wednesday’s late surge. And opening under 1305.00 would trigger a session-long decline.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Having been marginalized Tuesday afternoon, there was a window available for sellers to retake control Wednesday. They did not. They didn’t even try — the afternoon ranging was pressured by weak-handed sellers. When sellers trigger their next sell signal (assuming that they ever do again), the result could be very productive. [/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.