Trading Plan for 2/2

[pay]At the close (How the prior session ended)
The afternoon’s suspicious 1083.75 bias-up signal kept sellers from gaining traction. But it didn’t produce higher highs during the afternoon’s bias-up environment. And it didn’t produce higher highs when the bias-up started lapsing after 2:30.

Nevertheless, repeatedly testing resistance does tend to “earn” at least a brief breakout attempt. So, Monday’s final minutes did eventually print fresh highs up to 1086.50.

Pattern points (And technical influences)
The corrective bounce potential to 1082.00-1083.00 was a function of Friday’s pattern. It attracted the cash session’s first hour higher, and then it restrained trending  for the balance of the day. Until the final minutes.

1086.75 is the noise range’s upper-end around 1082.00-1083.00. This is where a higher high could still be considered noise around the bounce potential. Breaking it any earlier could have been considered a breakout. Monday’s break originated too late for its sponsorship to be credible.

Monday’s bounce narrowly avoided being “ineffectual optimism.” But it was still only an “inside day” whose rally didn’t gain any traction. A lot of buying energy was expended just to fulfill the bounce potential.

The gap back down to Friday’s close under 1069.00 isn’t the only unfinished business below. RSIs were oversold on the last overnight dip under 1069.00, as well. Monday’s bounce isn’t the start of a durable bounce. But the bounce needs to end Tuesday or else possibly delay the decline’s resumption until Thursday afternoon.

Bottom line (My underlying premise)
Tuesday’s opening 15 minutes of volatility might probe 1-2 points higher, still. Delaying a dip any longer would mean a bigger corrective bounce – next targeting 1091.75. Gapping down Tuesday under Monday afternoon’s last relative low (1080.00-1081.00) would reject Monday’s last-minute surge, and reverse momentum down.   [/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.