Trading Plan for 3/15

What JPM’s dividend hike giveth… Wednesday’s reaction failed to take away. Half of Tuesday’s surge to 1391.00 was retraced at Wednesday’s low; 61.8% of the overall gain up to Wednesday’s opening high. But sellers did not regain control, and so far only threaten the rally’s momentum.

Pattern points… (Setups and technicals)[pay]
Wednesday morning’s late no-bias that triggered at 1393.50 created the objective to test the 1384.50 bias-down signal. Its attraction influenced the morning’s dive to 1387.50, but did not require being tested. It was retested anyway.

Having fulfilled its selling pressure, oversold RSIs at 1384.50 launched a bounce to 1388.25. The test of overnight lows from below, i.e. “higher prior lows,” was ongoing through the close — not clearly broken, not clearly held.

Wednesday’s Expiration Indicator would have been clearly bearish by closing under ~1387.00 and/or 1386.25, the overnight low and Tuesday’s reaction down to the bank stress test results. Even that would only suggest a downward bias into and out of expiration. A downleg is not required, but another upleg is less likely.

Wednesday’s negative close avoided confirming Tuesday’s breakout. This doesn’t prevent a fresh high close Thursday, but it should also not be confirmed Friday. Gapping up above 1389.25 would at least suggest Wednesday afternoon’s overbought RSIs at 1392.75 will be retested. Its immediate recovery at the open would reconsider Wednesday’s Expiration Indicator as having been bullish.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Housekeeping note: I will be unavailable for Thursday’s last hour, and there will be no Market Wrap.[/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.