Trading Plan for 2/26

[pay]At the close (How the prior session ended)
Thursday afternoon’s recovery extended into the last hour. The mid-afternoon consolidation up to 1098.00 had potential to extend up to 1101.00. A dip probed 1098.00 support by 1 point, then bounced to probe 1101.00 by 1 point.

The 3:10-3:20 window trended down throughout, so the buying that followed was weak hands. And the last hour’s dip didn’t probe a lower low to refuel buyers. A lot of energy was expended in only getting the market back to unchanged.

Not quite unchanged, actually. The 1-point deficit back to Wednesday’s 1103.50 close might reflect just enough pessimism to keep alive the recovery into Friday’s open. Thursday’s entire last half-hour was close enough to fill the gap at any time, and didn’t.

Pattern points (And technical influences)
Still, the recovery did come close enough to unchanged that buyers failed to gain traction for their efforts. Extending higher at Friday’s open would still be vulnerable to reversing down before the bias signal. Not extending higher would be likely to repeat the reaction to Wednesday’s late levitation act – and slide down sharply.

Thursday’s opening consolidation extended through the noon hour to validate its relevance. It is not a false break, and its retest is required. That retest’s objective begins at the range’s ~1090.00 upper-end or “lower prior highs” and stretches down to the open’s 1087.50 gap.

The afternoon’s recovery originated during a no-bias environment, requiring its complete retracement. And having delayed the retracement through an additional timing window, the objective should be exceeded. A new relative low at 1080.25 would suffice, but 1075.00-1076.00 is more likely.

Thursday’s sellers had a “session-long” decline going for them, but the open bit off too much to digest. Instead of the last hour going out on session lows, it inverted to end at session highs. Nevertheless, the open’s rejection of Wednesday afternoon’s upleg wasn’t rejected, wasting a lot of buying pressure.

Bottom line (My underlying premise)
Friday’s news flow is a different kind of mine field than Thursday’s unusual mix. The first half-hour is treacherous, and initial trending would be vulnerable to reversing. But this being a Friday, the morning’s ultimate bias signal is likely to persist through the noon hour, whether bias-up, down or no-bias.  [/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.