Trading Plan for 3/16

[pay]About that close (How the prior session ended)
It took awhile for the morning’s no-bias drop to recover. But Monday’s last 90 minutes did rally from the morning’s 1139.75 bias-down signal back to Friday’s 1146.50 futures close. And that was up from the morning’s 1136.50 low.

The oversold condition at Monday’s low is now overbought. Similarly, having filled the gap back to Friday’s close, its attraction is neutralized. And the recovery failed to close in positive territory, so its buyers gained no traction.

Pattern points (And technical influences)
Even before Monday afternoon’s rally began, the setup had already warned the same thing as late Thursday – that a rally’s sponsorship would be weak hands. Naturally then, the rally’s weak handed sponsorship has nothing to show for the energy it expended.

Of course, sellers didn’t gain traction either. And Monday’s close held Friday’s lows as support. This keeps price in the orbit of Friday’s 1150.00 opening gap. Unless Tuesday’s open were to reject Monday afternoon’s rally (by gapping under its 1138.25 origin), there’s still potential back to 1150.00-1152.00.

Meanwhile, the session’s volatility keeps alive the “rubber band” setup. The analogy loses its meaning a little here – so long as the market is still reverberating. The optimal bearish setup would quickly reject an early surge. A bullish setup would recover from another dip to 1142.00.

Bottom line (My underlying premise)
While the optimal resolution would begin early Tuesday, Monday’s volatility did buy the pattern some time to rest. Tuesday afternoon’s FOMC meeting would be an well-timed catalyst, able to jump start a flat market, reverse a trending attempt, or else accelerate one.[/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.