Trading Plan for 7/3

If low volume is bullish… then is high-volume necessarily bearish? Not necessarily, but high-volume and volume surges has been more vulnerable to dips, even if only temporary. Interesting, perhaps also timely, since Thursday morning’s econ calendar has quite a few high-profile items scheduled.

Pattern points… (Setups and technicals)[pay]
Quite a few high-profile items scheduled for Thursday morning, and a market that has no “unfinished business above.” What the market does have is an incentive to trend down. Tuesday fulfilled its obligation for one more new high close, and Wednesday’s narrow ranging session could not confirm.

Extending higher without a refueling dip would likely be at a steep slope. And a retest of Tuesday’s 1971.75 high would be likely to hold, either at 1972.00 or 1974.25. Not reacting down sharply would be vulnerable to floating higher into the early close.

Several high-profile influential pre-open events are scheduled (BOE and ECB interest rate decisions, ECB press conference, Employment Situation report). Gapping down in reaction to any of them could extend, but that would also run into the early close restraints. The big line in the sand is 1958.50, and its test would become likely if an early or pre-open test of Tuesday’s high were rejected.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Being a Friday, the morning’s bias tends to persist through the noon hour. Being an early close, there is no afternoon bias parameter. Often, the persistence of the morning’s signal is accentuated into the weekend.[/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.