Trading Plan for 2/10

Wednesday’s extra vulnerability to ending down was averted only by a late surge. But more damage was done to support, and no business was left unfinished above.[pay]

Pattern points… (Setups and technicals)
Wednesday’s late surge from testing 1315.50 didn’t start by 3:10-3:20. It didn’t even start by 3:30. The late surge started when the position-squaring window started lapsing at 3:52-3:53. That was too late to be sponsored by strong hands.

Buyers gained no traction for the energy they expended. The cash session close equated to 1318.75, the afternoon’s prior high. The post-close surge to 1320.75 settled back at 1318.75. That’s a long way off the 1311.75 low one hour earlier. The late recovery may have been only relief rally when it became too late for the decline to resume.

Wednesday’s entire session bordered on being “ineffectual pessimism,” which could be bullish from a contrarian perspective. Gapping down and ranging entirely in negative territory, probing lower lows. But instead of just recovering back above the morning’s lows, the late surge has already released all the pent-up buying pressure.

What’s Next… (Outlook and opportunities)
If the “ineffectual pessimism” is influential, then Thursday should gap up. Its objective would be 1324.00 again, whose test remains likely to push back down. Otherwise, immediately rejecting the surge from 1315.50 and extending under the morning’s 1314.00 lows would target 1306.00 “lower prior highs.”[/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.