Trading Plan for 2/3

If … then .

Pattern points… (Setups and technicals)
No sellers were trapped by Monday afternoon”s rally to fresh session highs. That”s not often the case. Sure, rallies can develop without trapping sellers, but Monday afternoon”s rally was pretty substantial — 45 points off the morning”s low.

Nevertheless, Monday afternoon”s rally to 2018.50 began from the bias environment”s 1983.50 low. But the bias environment exit and final hour entry were still well under the noon hour”s 2000.00 high. That”s not a stable base for launching a durable rally. Perhaps if the rally had recovered a prior high, but it did not. (More on that in a moment.)

The 3:10-3:20 timing did trend up to fresh highs. That would have been bullish if either the bias environment exit or final hour entry had exceeded the noon hour”s high. Instead, the 3:10-3:20 window produced follow-through into the close, which has now lapsed.

So, what if the rally HAD recovered a prior high? Thursday-Friday”s ~2017.50 high was tested, but not exceeded. The next prior high that Tuesday”s open can recover to gain traction is essentially 2038.00+. That”s another 20 points higher, and probably needs news to achieve it — news that attracts more buyers through the open instead of reversing back down.

What”s Next… (Outlook and opportunities)
Had Monday”s 3:10-3:20 window not trended up, or not extended higher through the close, then Tuesday”s open need only have recovered Thursday-Friday”s ~2017.50 high to extend Monday afternoon”s rally. Instead, all available buying pressure has been expended without gaining traction for the effort. And oversold RSIs at Monday”s 1973.25 low require a retest.