Trading Plan for 2/27

If not for Tuesday morning’s recovery attempt… then pent-up buying pressure could have launched an afternoon rally. Instead, an afternoon drop took the market back to square-one. Better luck next time… Thursday?

Pattern points… (Setups and technicals)[pay]
Wednesday’s session left outstanding a retest of the 1838.00 low’s oversold RSIs. It was the product of 3 errant ticks, and its retest came within 1 tick. Rallying prior to its retest could still extend, but retesting it first would be optimal. Overnight would qualify, similar to last week’s dip that held 1818.00-1819.00.

The afternoon’s plunge that produced the oversold RSIs was itself a retest of the morning lows oversold RSIs. Probing under the prior low still held through the close. That’s a lot of selling pressure — plunging, probing — without gaining traction for the effort. And that’s not bearish.

The afternoon’s plunge originated during a no-bias environment, so its sponsorship is weak-handed. A recovery back up to the 1844.75 bias-down signal was fulfilled to within 2 ticks, which is close enough not to become “unfinished business above.” But the bounce stopping pessimistically short of actually touching 1844.75 above — not to mentionhigher prior lows at 1846.00 — after holding the prior low’s retest, doesn’t speak well of sellers.

[/pay]What’s Next… (Outlook and opportunities)[pay]
None of which precludes probing even lower lows, in even the most bullish scenario. Whether a knee-jerk reaction to Yellen’s comments Thursday morning, or defensive posturing ahead of her appearance, holding 1834.00 support would still be likely to resolve up, and potentially extend to new 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.