Trading Plan for 3/1
[pay]At the close (How the prior session ended)
Friday’s pre-open dip was deep enough to launch a bounce back up to the 1107.75 overnight high. But it didn’t. A test of the 1097.00 bias-down signal was deep enough for the 1107.75 bias-up signal to be met. But it wasn’t.
Not for lack of trying. The morning’s 30-minute 10-point peaked at 1106.00. The afternoon’s two-hour 6-point rally reached 1106.50. But the cash session still closed essentially flat on the day (a pattern established at the open).
Pattern points (And technical influences)
Two setups were formed at Friday’s close. The first is the basis for a session-long decline, triggered if Monday’s open were to gap down under 1101.00. That’s the afternoon’s low (excluding the noon hour), and it is relevant because Friday’s last trending was up.
The other setup is the “Friday Factor,” which doesn’t often form. Both the opening and closing 15 minutes trended in the same direction – down – so Monday’s open is likely to initially trend down, too. The setup doesn’t influence relative value, only direction. So, Monday’s open can gap up and the first several minutes can then trend down.
Friday’s inability flat close proves that Thursday afternoon’s rally didn’t gain traction. The morning’s dip to 1097.00 could have refueled buyers, had a rally followed by the close. Instead the dip chipped away at the only real support standing between Thursday morning’s 1090.00 lower prior highs.
And a retest of 1090.00 remains likely because that’s where Thursday afternoon’s no-bias rally originated. There’s still minor unfinished business above, the 1107.75 overnight high. Its recovery would give the bounce one more chance to extend past last week’s highs.
Bottom line (My underlying premise)
Monday’s econ calendar isn’t as busy as Friday’s gauntlet, but it’s unusually busy for a Monday. Early trending can once again be vulnerable to reversing direction, if not accelerating. [/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.