Trading Plan for 2/10
[pay]Pattern notes.
That was weird. Sunday night’s low fell to a double-digit loss from Friday’s close at 852’75, but it was recovered entirely at the cash session open. Another dip triggered the morning’s bias-down signal, but it was followed by a probe of higher highs (maxxing out the 872’00 potential from Friday). The open’s dip to 859’00 required a retest, which was attempted several times intraday, but never fulfilled.
Apparently the cash session just needed to get out of its own way. An hour of narrow ranging just above 859’00 suddenly gave way so price could dive to 853’00 and lower – 1 point under Sunday night’s low. A bounce to 859’00 has been retraced entirely back to the low. Monday’s open had already recovered Sunday night’s loss, and Tuesday’s open might recover Monday night’s loss. That would be really weird.
Weirder, yet, would have been to extend Friday’s rally. Gapping down Tuesday would indicate that the market intends to compensate for Monday’s delay, not to mention Friday’s. A weird overnight recovery by Tuesday’s open would suggest something powerfully bullish going on. And gapping down Tuesday could still need to refuel sellers with an immediate bounce. But absent an overnight development that adds some previously unknown bullish perspective, the burden of proof is still on buyers.
Indicators and Internals.
Technicals have deteriorated into the overnight drop. Their lower lows haven’t kept perfect pace with price, but I wouldn’t characterize any of it as diverging positively. There doesn’t yet seem to be an opportunity to avoid a more substantial probe or break under Sunday night’s lows.
Tuesday’s opportunities.
Monday’s last significant price action was a bounce. Most of the bounce was retraced by the close, leaving just enough margin so that a gap down under the afternoon’s 860’00 low can signal a session-long decline. By the same token, a gap above 871’25 would signal a session-long rally. The economic calendar is relatively light, and not an issue soon after the open. [/pay]