Trading Plan for 2/23

Ignoring the overnight rally… would seem to have a purpose. One purpose might be to trend down, instead. Wednesday’s session did spend its entirety in negative territory. And it did end lower. But it did not trend down, and that doesn’t really reject the overnight rally so much as ignore it.

Pattern points… (Setups and technicals)[pay]
There was no hold-short indicated through Wednesday’s close. That is despite the likelihood of dipping further to touch at least 1353.50 at some point before any sizable bounce would be credible. And that is despite the less likely, but still likely potential to probe fresh lows at 1351.50. These attractions could be met overnight, and react up to greet Thursday’s open already in recovery mode.

In any case, Friday’s 1355.00 low was still being tested at the close, essentially holding as support. And that was despite being probed intraday. That is an interesting turn of events from Tuesday and Wednesday’s inability to hold and recover above Friday’s ~1361.00 high.

And that is a weakness that sellers have been unable to exploit for a second consecutive session.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Two full days under pressure, but not extending down, still in nearby proximity to Sunday and Monday night’s highs. Immediate weakness at Thursday’s open would get a benefit of the doubt for extending lower. But immediate strength — regardless of whether Wednesday’s lows were retested — would be credible for retesting the 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.