Trading Plan for 7/8

If retracing Thursday’s session could correct last week’s rally… then would resuming it be likely to extend much higher? Not yet. Thursday’s session was retraced back down to Thursday’s low at Monday’s open. And it was retraced back down to Wednesday’s close by midday. If the market wants to produce more than fresh highs, then it will need to extend the pullback deeper.

Pattern points… (Setups and technicals)[pay]
That deeper pullback would target 1958.50-1961.75. Back under 1968.50 would start to signal its test underway. Testing it overnight could suffice, and already be in recovery mode before Tuesday’s open. Testing it Tuesday morning must exit the noon hour in recovery to be assured of not extending down.

One template emerged at Monday’s close which was recovering back up to Thursday morning’s 1971.25 low. To it, and not through it. Being the minimum objective to retracing Thursday’s rally, closing there does neutralize any downward momentum. It doesn’t reverse momentum up — but back above 1972.50 would.

I’m not sure whether extending the dip to 1958.50-1961.75 would refuel buyers to do more than retest last week’s high. Already rallying at or soon after Tuesday’s open would likely be done at a steep slope, but not a durable one.

[/pay]What’s Next… (Outlook and opportunities)[pay]
The econ calendar starts to get interesting… Tuesday afternoon. Price action is otherwise still free to fluctuate without needing to respond to economic health. That was tough to navigate Monday.[/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.