Trading Plan for 3/12

If Tuesday afternoon’s drop had come Tuesday morning… then Tuesday morning’s buyers would have been capable of absorbing it and recovering. But Tuesday morning’s buyers weren’t patient. The open’s gap up failed, as did the late-morning recovery. So, the question now is whether patient sellers have been rewarded.

Pattern points… (Setups and technicals)[pay]
The minimum reward for Tuesday’s sellers was to retest Monday’s 1865.75 low. It was tested by almost 3 points, and recovered by 2 into the close. The might have been the end of that, except that Tuesday afternoon’s drop gained traction.

The afternoon’s drop entered the final hour under the bias environment’s low which was exited under the noon hour’s range. Sellers’ new reward is some sort of complexity or trending under Tuesday’s low. Turnabout is fair play, like inverting the setup by gapping up above at least the bias environment’s 1873.25 high, would be confirmed above the noon hour’s 1875.00 high.

Otherwise, fresh lows are likely to visit 1856.50-1858.00. Any lower through a relevant timing window would undermine whether this is only a detour — from retesting Friday’s 1887.50 pre-open “new Globex trend extreme” and now also Tuesday’s overbought RSIs at 1882.25.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Hold-short wasn’t considered since the target was met and hold. The decline having gained traction does make selling an overnight break under 1864.25 compelling. But even if that were triggered, a corrective bounce remains possible, with room up to 1871.00. [/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.