Trading Plan for 8/6

[pay]About that close (How the prior session ended)
1124.00 was the only predictable or reliable resolution for Thursday’s opening measurements. It was finally met just before the session’s last half-hour. RSIs diverged negatively into its test. A reaction down to 1120.75 was recovered back up to 1124.00.

Pattern points (And technical influences)
Thursday’s session was very pessimistic. Most obvious is the open’s gap down, and spending the entire session in negative territory. Peaking just two ticks short of filling the gap back to Wednesday’s close is also pessimistic. All that pessimism was ineffectual, since the close recovered from probing prior lows as support.

Both Wednesday and Thursday’s closes failed to hold their brief probes above the morning highs. Buyers failed to gain traction for their efforts on both days. Thursday’s resolution was down. Friday’s resolution should be down, too, although not necessarily immediately.

Thursday’s ineffectual pessimism does keep the door open for a positive reaction to Friday’s Employment Situation report. Being a Friday, a positive reaction could become a positive day if not rejected quickly. The same can be said of a negative reaction that gaps under 1118.00. Regardless, a trading range into the afternoon would be likely if either support or resistance were to hold a test through the open.

Bottom line (My underlying premise)
Friday’s Employment Situation report is clearly feared. Thursday’s Jobless Claims triggered a fall that could hardly get up all day. Actually, almost all of the Jobless Claims reaction was recovered. But pessimism kept the session negative.

Like paranoia, which is reasonable when they really are out to get you, sometimes ineffectual pessimism is vindicated after a long enough wait. And now it’s all over, but the waiting.[/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.