Trading Plan for 7/3

If sellers aren’t really neutralized… then Tuesday’s slide won’t be retraced much higher or for very long after Wednesday’s open. Monday and Tuesday’s early rallies failed as they should have, but another failed rally with participation dwindling ahead of the holiday, could slide sharply lower.

Pattern points… (Setups and technicals)[pay]
Tuesday afternoon’s no-bias trending became very productive, extending under 1611.25 to 1600.25 in reaction to headlines. Its retracement peaked about 2 points short, leaving outstanding the retest of 1611.25 and possibly 1613.00.

Meanwhile, a second consecutive session rallied early, and was ultimately retraced. Tuesday’s close was back under Friday’s 1609.50 highs, and above Monday’s 1606.00 low. I would consider the potential Pavlovian response this pattern may be conditioning, but the holiday’s impending illiquidity renders that moot.

Wednesday’s early 1:15pm ET close means that any predictability will all but disappear by late-morning. The morning’s econ reports can offer some opportunities, but beware of holding or establishing any later position.

[/pay]What’s Next… (Outlook and opportunities)[pay]
If you’re leaving early, or already gone, have a safe and happy holiday. I’ll comment if merited by price action Wednesday night or Thursday. But Friday is a full day, and it begins with the Employment Situation report.[/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.