Trading Plan for 3/10

With inside days like this… who needs trending? None of Wednesday morning’s swings probed either end of Tuesday’s range. The wild moves were deceptive. No trending in the afternoon either, making the session an “inside day.” [pay]

Pattern points… (Setups and technicals)
Wednesday was the third consecutive cash session close that narrowly avoided signaling to hold short through the futures close. The prior two instances each rallied overnight. But only temporarily, and only to resume their declines into the following open.

4 points of the 5-1/2 point slide into Wednesday’s futures close came after the cash session close. Ending at fresh afternoon lows, under 1316.00 support, would signal new lows ahead – if triggered at the cash session close. It’s still possible, but the setup was triggered too late to be assured.

Another repeat item Wednesday is the dubious unfinished business left outstanding. The morning’s bias environment created the objective to test its 1324.00 bias-up signal (basis Mar). It never happened, and the bias environment was exited above the 1315.75 bias-down signal  (basis Mar) to make it “unfinished business.”

I don’t think it’s really a requirement. The bias-down signal was retested after having held the open’s test. That’s not in the spirit of simply delaying the off-setting bounce.

Overbought RSIs at Tuesday’s 1325.75 high (basis Mar) printed at noon. The timing also makes the retest not required. It seems that buyers are expending their energy when it is least productive. Closing at fresh highs would signal new sponsorship had arrived – if new lows don’t print first.

What’s Next… (Outlook and opportunities)
Closing under Wednesday afternoon’s lows requires a rally to gap up above Wednesday afternoon’s 1326.50 highs (basis Jun). Any less strength would be vulnerable to reversing down. And any weaker open that simply touches or breaks under 1308.00 (basis Jun) would target a probe under 1301.00 (basis Jun), and probably new lows for the week. [/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.