Trading Plan for 10/2

If the market wanted help absorbing Friday”s NFP… then dropping deeply to test far away “lower prior highs” is one way to do it. Expend a lot of selling pressure so it”s not a threat later. Entice shorts to join in, and they”ll help to push price higher when they cover. It”s a perfect plan. That is, until the decline falls below supports that were maintaining the trend..

Pattern Points… (Setups and technicals)
And that”s the big question. Is a healthy correction of the rally now/soon ending, or is the decline about to shift gears into hyperdrive? Have the bearish themes of the day discounted themselves in falling prices — Central Banks running out of tricks, Ebola coming to the US, ADP foreshadowing Friday”s NFP? Or, is the market precariously positioned to absorb selling pressure from the next shoe to drop?

The late 10-point bounce peaked at the Aug 15 1943.50 “lower prior high” whose recovery through the close could have undermined the decline. Immediately recovering 1952.00 Thursday could serve by proxy. Above 1957.00 would confirm.

Meanwhile, the required retest of oversold RSIs at Wednesday”s 1933.75 low could resume the decline with new sponsorship that is more dramatic. Unless the retest were neutralized overnight, and Thursday”s open were greeted in rally mode.

What”s Next… (Outlook and opportunities)
I”m creating a matrix / decision tree that I call the “3x3x4” describing how to apply the 3-minute / 4-tick rule to signals and limits. This is the best time for you to tell me ways that you think about the rules successfully, or any confusion you have with them, so I can design a more comprehensive utility for exploiting price action with my methodology. Just message me on the site, or email me, or call.