Trading Plan for 10/14

[pay]About that close (How the prior session ended)
Wednesday’s bias-up signal wasn’t triggered very convincingly at 1:20. Its eventual probe of fresh highs at 1181.00 was almost an after thought. And that’s how long it lasted. Its rejection eventually fell through 1177.50 to 1173.50. Every support was broken, but 1177.50 wasn’t clearly rejected at 2:30, or at 3:00.

Pattern points (And technical influences)
For spending all of the last 90 minutes trending down, sellers deserved more clarity for their buck. Timing windows are a reflection of who is active, and when. So, struggling to break under support – regardless of whether support did break – suggests its sellers were weak hands.

Weak hands, or not, the late selling did undo most of the cash session buying. The closing dip back to 1173.50 tested all of the pre-open highs. This suggests the cash session’s buyers were weaker hands.

The late drop was productive, retracing 61.8% back to the cash session low. This can be a healthy correction. But if Wednesday’s 1177.50 bias-up signal was invalidated, then there is no unfinished business above to recall price back up. That is a dangerous place to leave the session hanging.

It’s also dangerous since this is expiration week. If Wednesday’s new high close is trending, then it marginalized sellers through Monday morning. Otherwise, spiking or gapping down at Thursday’s open would mean Wednesday’s buyers were the weak hands. More than marginalizing them, the balance of the week would likely trend down sharply… Nothing that an overnight rally back above 1179.00 can’t reject.

Bottom line (My underlying premise)
The economic calendar takes on more influence than usual. It is already a busy day of econ reports, but there has been a drought since last Friday. And this Friday has to contend with expiration. Thursday’s price action should be choppy. Choppy, without trending down, would be bullish. [/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.