Trading Plan for 2/16

Fallen, and can’t get up. Repeatedly dipping to 1325.00 overnight bled into Tuesday’s open, and lasted through the day. It would be premature to consider sellers in control. But Monday’s confirmation of Friday’s breakout was clearly premature. And possibly wrong.[pay]

Pattern points… (Setups and technicals)
Tuesday afternoon’s drop fell back to the morning’s 1322.25 low, but no lower. The interim bounce had not probed any prior high, so the selling was only noise. Sellers expended lot of energy without gaining any traction for their efforts.

Then a bounce into the close expended buying pressure. And it retraced 61.8% of the drop, without closing any higher. Its buyers gained no traction for their efforts, either.

Tuesday morning’s bias-down signal triggered under 1325.00. Despite an interim bounce up to 1328.00, the bias-down environment was exited back at 1325.00. Or under it. But not above it, which would have invalidated the 1318.50 bias-down target. This would be the minimum objective of any break lower.

What’s Next… (Outlook and opportunities)
Trending will be difficult to start if attempted from within Tuesday afternoon’s 1322.25-1328.00 range. Opening Wednesday above 1328.00 would target new highs at 1332.00-1333.00. Any weaker opening strength would be vulnerable to reversing back down to and through Tuesday’s lows.[/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.