Trading Plan for 2/9

Inside day, to a point… Early weakness was absorbed, and the prior session’s high was probed. Fresh highs were either too brief, or too late, to constitute a breakout. Closing under the interim low could seal a top.[pay]

Pattern points… (Setups and technicals)
1320.00 was Monday’s high (the upper-end of its 1318.75-1320.00 intraday target). Tuesday afternoon probed it a couple of times. But it wasn’t permanently recovered until the session’s last 15-30 minutes (highlighted yellow, circled green).

This is not a relevant window. Opportunities to recover 1320.00 during earlier relevant windows were not exploited. This undermines whether buyers are gaining traction.

Also depicted in the chart is “pivotal uptrending support.” Its anchor and connector are circled red. Often this trendline holds through only one or two tests before being broken. Then its complete retracement is only a formality. The trendline held Tuesday afternoon’s last two dips.

What’s Next… (Outlook and opportunities)
There are two possible paths down. One path down would first probe new highs up to 1324.00. Alternatively, spiking or gapping down under Tuesday afternoon’s 1317.00 or 1318.50 lows could trigger a session-long decline.

Opening only slightly weaker would be likely to recover for a test of 1324.00. Its test would still be likelier to hold, and to launch a reversal down. Extending up uninterrupted through the open may be the only bullish scenario.[/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.