Trading Plan for 10/23

[pay]Pattern notes.
Wednesday’s low at ESz 872’50 printed with 20 minutes left in the session. Buyers made good use of those remaining 20 minutes, rallying back to 900’00. Then to 907’50 minutes later. And eventually up to 912’00 so far overnight.

If bulls truly want to form a bottom, then they should leave the 40-point rallies for another day. Another day when the effort can exploit depleted sellers, instead of refueling them. Another day that isn’t much further away, if the 40-point rallies can wait. Bouncing from within 7 points of a prior low, after falling 120 points from the interim high, isn’t a good way to leverage that optimism for further gains. And a new session low in the last half-hour of a session-long decline is not the decline’s bottom.

The shape of Wednesday’s “V” bottom makes it likely to be retested. At least. And the bounce is welcome to end anytime, especially since it is now testing 911’00, which was an important target of the decline’s original drop. That would be better for bulls, a decline down to prior lows under 837’00 that extends the pessimism to an unsustainable extreme, instead of letting sellers refuel.

Indicators and Internals.
3-minute RSI printed its session low simultaneously with price. The “V” bottom makes its retest likely, but the oversold 3-minute RSI requires it.

Thursday’s opportunities.
Jobless Claims due before the open is pretty much the day’s econ calendar. Meanwhile, the earnings calendar continues to draw more attention. So long as the 911’00 area isn’t recovered, especially through any relevant timing window, the retest of Wednesday’s low will remain likely. And so will its break.[/pay]