Trading Plan for 3/14
Natural disasters can force artificial bottoms… Absorbing a black swan event is tough work. But it’s not accumulation. 
Either its low must be retested to form a durable bottom, or else the low’s retest doesn’t form a durable bottom at all. I wonder what a second black swan would do to the tenuous situation.[pay]
Pattern points… (Setups and technicals)
Sellers had not gained traction by 2:30 Friday when the afternoon’s bias environment started lapsing. That further decreased any likelihood for sellers to regain control before the close.
There was no requirement to trend higher. But entering Friday’s last hour at fresh highs increased the likelihood, anyway. In fact, a surge into the last hour from under 1300.00 probed the 1303.00 bias-up target. But the last half-hour retraced it all.
That last hour was distribution. It was not accumulation. It was not backing and filling. It didn’t even satisfy a required target, just a potential target, making sure there was no unfinished business above. Higher prior lows were tested as resistance. The higher prior lows held as resistance.
If the weekend’s developments don’t have the impact of a second black swan, at least two landmarks above could be in-play – like the gaps back to Wednesday’s 1310.50/1314.75 closes, or Tuesday’s ~1320.00 prior highs. Recovering them without delay may be the only alternative to resuming the decline through this week.
What’s Next… (Outlook and opportunities)
Friday’s last trending was up, and the afternoon’s 1293.50 low preceded its last hour. Maintaining a gap down under 1293.50 would trigger a session-long decline. Living up to its name would end the day back under last week’s lows. And that would all but confirm last week’s decline had begun a much bigger downleg.
Rallying instead would target last Tuesday’s ~1320.00 highs. But sellers could still regain control. Gapping up Monday above 1317.00-1320.00 would be a more credible rejection of the interim drop.[/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.