Trading Plan for 7/1

[pay]Pattern notes.
The narrowness of Sunday night’s range helped to predict that Monday’s cash session probably wouldn’t trend. Not having any requirement in-play to trend either way was also a factor. Tuesday’s session has a similar freedom that would allow early trending to define a direction independent from Monday’s influences. Of course, with freedom comes responsibility, and no early trending would leave Tuesday’s session captive within Friday’s range, as was the case Monday.

There is no unfinished business above the market whose resolution can be counted upon to attract price higher. A gap up above Monday’s late afternoon highs at ESu 1289’00 would be a start, at least for a corrective bounce with potential to 1306’00-1307’00. This week would be appropriate for that, coming into the seasonal bullishness of a 3-day holiday weekend.

But first things first. There isn’t any unfinished business in-play below the market either, but there does happen to be a requirement to probe new lows for the year. New lows by only about a dozen points down to 1244’00 would satisfy the requirement without letting sellers gain traction, and this would would be appropriate for that. I can’t say that new lows this week won’t continue falling, but waiting too long until after the holiday would be more difficult to recover.
Indicators and Internals.
35% more NYSE down volume than up volume produced 45% more declining issues than advancers. S&Ps finished unchanged, somewhat mitigating the internal negative divergence, and also mitigating Tuesday’s obligation to reward Monday’s sellers for their relative productivity.

Tuesday’s opening setup.
Tuesday morning’s usual Retail reports are followed by two econ reports due 30 minutes after the open. The timing necessitates tightening stops relatively tightly going into the news if trading at all by then. It also allows greater confidence in any trending underway when the dust settles at 10:15. [/pay]