Trading Plan for 2/25
If the confirmed trend change signal allows sellers to rest… then Friday’s bounce would have refueled them. There is a very eery feeling that a much stronger down move has been stalking the correction off of Thursday’s low, ready to pounce from the shadows now that Friday ended the correction.
Pattern points… (Setups and technicals)[pay]
Almost left outstanding at Friday’s close was the afternoon’s 1515.50 bias-up target. Buyers delayed their aggression until the close. It was a 2-point surge at the cash session’s final minute that fulfilled the target to within 2 ticks at 1515.00.
Buyers were lethargic throughout the afternoon. The 1509.25 bias-up signal had been signaled cleanly, but the balance of the bias environment only ignored it. Not until the last half-hour was the noon hour’s 1512.00 high probed. And, then, only by 1 point, until the final minute.
The afternoon was the definition of range bound. The bias environment was exited within the noon hour’s range, and the final hour was entered with both ranges. The 3:10-3:20 timing window ranged narrowly at a prior high instead of trending through it. This would have been unremarkable if not for being juxtaposed against the overnight rally.
Meanwhile, bonds held up as if Thursday’s buyers weren’t ready to return from their flights-to-safety. No unfinished business above was left outstanding. “Higher prior lows” around 1511.50 and previous critical support/resistance at 1515.00 were retraced. Having trended up into Friday’s close, immediately breaking back under Friday afternoon’s 1508.75 low would trigger a session-long decline. Recovering 1518.00 instead would extend the corrective rally to 1526.00.
[/pay]What’s Next… (Outlook and opportunities)[pay]
Join us for the Saturday Strategy Session at 9:30am ET. There will be a lot to discuss, including this week’s trend change signal, and many high-profile stocks that have been affected. Or, the other way around.[/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.