Trading Plan for 3/15

Monday’s open maintained a gap down under Friday afternoon’s 1293.50 low, triggering a “session-long decline.” The setup does not necessarily trend down relentlessly. But it does tend to print its session low during the last hour.

Not Monday.[pay]

Pattern points… (Setups and technicals)
Monday’s 1281.00 low printed during the noon hour. Soon after, I noted that “RSIs aren’t deteriorating with price. Beware of a bear trap.” That was at 1282.25. Four hours later 1293.50 was tested before the close.

Probing the morning’s 1295.25 high would have invalidated the session-long decline. The intraday high wasn’t probed, so a probe under Monday’s 1281.00 intraday low is now unfinished business below.

Another pattern also suggests that Monday afternoon’s rally only refueled sellers. Friday morning’s Symmetrical Triangle had forecast that its breakout would be false. And having already met its targets Friday, the breakout was directionally false, and not premature.

The consequence of a directionally false breakout is to reverse more substantially in the opposite direction. Monday’s probe under the Triangle measured only half of Friday’s probe above it.

What’s Next… (Outlook and opportunities)
Resuming the decline Tuesday would triggered under 1287.50, targeting a retest of Monday’s 1281.00 low. Fulfilling the more substantial reversal leg of Friday morning’s Symmetrical Triangle would target 1276.50 and potentially 1268.00.

Early strength Tuesday could fill the gap back up to Friday’s 1299.00-1301.50 close without buyers gaining any traction for their efforts. Recovering 1294.25 would be a good start.[/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.