Trading Plan for 3/11

If Friday afternoon could recover all of the morning’s dive… then does that mean it wasn’t just noise? No, and not only because the close was flat with the opening gap up. Several other important reasons are listed below…

Pattern points… (Setups and technicals)[pay]
Closing for two consecutive sessions above 1528.00 had created a higher objective at 1548.50. It was tested to within 3 ticks by the knee-jerk reaction to Friday’s Employment Situation report. Regardless of whether that suffices, it should not be the rally’s ultimate peak.

That’s because of Friday’s new high close, the first in three weeks. It doesn’t prevent an immediate downturn, but it does say that an immediate downturn would be temporary

Speaking of which, a downturn soon would not be surprising since Friday afternoon’s recovery was not the product of trending — it gained no ground that wasn’t already tested at the open. Retracing the morning’s 10-11 point slide expended buying pressure only to gain a more positive close. The low of the 10-11 point slide was still optimistic for barely probing negative territory.

“Lower prior highs” down to 1518.00 or 1512.00 would have been likely objectives in a corrective leg. Already testing and retesting 1548.50 makes it more difficult for that deep of a dip to be only corrective. But extending higher through Monday’s close without yet beginning a corrective dip could put into play 1570.00 (1575.00 basis Mar).

[/pay]What’s Next… (Outlook and opportunities)[pay]
This weekend’s Saturday Strategy Session starts at 9:30am ET. Hopefully, it will compensate for losing the other hour this weekend.[/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.