Trading Plan for 3/12

The rally everything going for it… at Friday’s open. Good reaction to good econ report, probe of fresh highs, bias-up. But the only buyers still involved after mid-morning were only able to hold prices aloft. Whether that strategy worked will be determined at Monday’s open…

Pattern points… (Setups and technicals)[pay]
Two consecutive timing windows ranged narrowly around Friday morning’s 1367.00 bias-up target. The target had been met already an hour after the open. A plunge to 1362.75 finally left the range, entering the session’s last hour under the bias environment’s lows.

The last hour’s range was briefer, but just as shallow, and no more relevant. A surge from 1363.00 into and out of the 1365.00 cash session close extended up to 1367.50. Almost as if the break lower never happened.

But there is still a burden of proof on buyers to extend the rally. Friday’s narrow ranges do not require resolving one way or the other. The pattern is only vulnerable to breaking higher or lower.

Just for having probed under 1364.00 there should also be a test of 1358.00. Maintaining a break under 1361.00-1362.00 through Monday’s open would put into play 1355.50, and any lower would essentially target a retest of last week’s 1332.75 low.

An overnight dip to 1358.00 could be recovered in time to greet Monday’s open in positive territory. Regardless of the potential for probing lower — and because of that potential — the rally relies upon gapping up Monday above Friday’s 1368.50 highs. Not gapping up would be vulnerable to trending down.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Join us Saturday morning if you can for the weekly Strategy Session. It begins at 9:30am ET. The link is in the sidebar (it is not held in the daily chartroom). We’ll look at the market’s bigger picture, review several setups, and analyze any stock requests. [/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.