Trading Plan for 10/4

If not for news stories… then the past two afternoons might have trended into their closes. Thursday’s recovery happened to peak when the capitol shooter story broke. Wednesday afternoon’s consolidation got word of a meeting at the White House, and that was the end of its trending. The impending weekend might not change that pattern.

Pattern points… (Setups and technicals)[pay]
Thursday’s session left no unfinished business below, as its 1670.50 bias-down target was met at the morning low. Thursday actually neutralized unfinished business below — retesting the gap back to Monday’s 1670.00 opening print, retesting Monday’s 1666.75 low, and filling the month-old gap back to 1663.25. The cash session close even equated to the morning’s 1670.50 bias-down target. Nice touch.

Just one thing is missing for a rally — a trigger. Buyers gained no traction for their effort Thursday afternoon, so they’ll need a gap up Friday to regain control. Actually, since Thursday trended down into its close, gapping up above its 1677.50 bias environment high would trigger a “session-long rally.”

Failing to rally need not decline by default. But the door is open. Thursday’s late break lower was 1 minute too late to qualify for a hold-short. Extending lower anyway to break under 1662.00 would put into play 1648.00, and potentially 1629.00.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Fridays are interesting for their mornings being vulnerable to exacerbating early trending. Exacerbated, or not, morning trending often leads to a predictable afternoon. No morning trending often leads to a slow afternoon. Don’t forget, there is no Employment Situation report to serve as a catalyst.[/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.