Trading Plan for 2/24

[pay]At the close (How the prior session ended)
Tuesday’s cash session ended in steep decline. Fresh afternoon highs probed 1097.00, then fell 5 points. That took all of 40 minutes. The next 15 minutes into the futures close retraced the entire drop.

Wednesday’s open could have been greeted by an oversold condition, but the post-close surge erased it. And in its place was left a 4-1/4 point premium to the cash session close that will try to attract price down at Wednesday’s open.

Pattern points (And technical influences)
The entire session was spent in negative territory after the open gapped down, probing new relative lows down to 1090.25. This was productive selling. New session lows did recover  back above the morning’s 1094.00 low, robbing sellers of their traction. But buyers didn’t gain traction in their place.

That would have required a recovery above the 1097.25-1098.00 mid-morning highs. That was attacked twice during Tuesday’s last hour, plenty of time to extend higher – if that were the market’s intent. Now 1097.25-1098.00 can be probed – up to 1101.00 or 1104.00 – but probably only to refuel sellers.

3-minute RSI made lower lows into the session low, undermining the quality of the afternoon’s bounce. It was the only instance of impatient optimism, after the morning’s impatient pessimism caused a shallow bounce to resolve down prematurely. A gap down Wednesday won’t necessarily extend down, not immediately, probably now without maintaining a break under 1088.00.

Bottom line (My underlying premise)
Regardless, the ultimate resolution is still likely to be down. All dips to 1093.00-1095.00 have chipped away at its support. All rallies above it have been distributive. The news flow is getting interesting, and only gets more interesting through the week.[/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.