Trading Plan for 3/17

[pay]About that close (How the prior session ended)
Tuesday morning’s 1153.00 high was retraced down to 1149.00 ahead of the FOMC news. Its reaction probed the morning’s high by 1 point before again retesting 1149.00. The highs were retested again into the close.

Instead of refueling by trapping shorts under its its interim low, buying pressure was expended to probe the range’s upper-end. Tuesday’s last half-hour probed the morning’s high up to 1155.75, but the fresh high was only 61.8% above the 1149-1152 range, so it still qualified as being noise – not a breakout.

Pattern points (And technical influences)
The news is out, and when the dust settled on its reaction, price remained higher. This tends to be one of the market’s behaviors that is self-fulfilling. Higher highs are likely Wednesday, even if only temporarily.

Extending to new highs without delay would be more bullish than pulling back first. It may seem counter-intuitive, but an early dip would confirm that the FOMC news didn’t attract new buying sponsorship.

A weaker open should recover from testing 1150.00-1151.00 – again, even if only temporarily. Almost any higher close Wednesday would extend the rally to 1170.00 and potentially 1179.00.

New highs are not a sell signal. A break lower requires a break (of support) lower. Intraday moves don’t necessarily hold through the close. Wreversal Wednesdays are vulnerable to reversing the prevailing trend. But a sell-off that wasn’t substantial enough to reverse under 1146.00 would be suspicious.

Bottom line (My underlying premise)
Buyers still get a benefit of the doubt as they did at Monday’s open, Tuesday’s open and Tuesday’s mid-day dip. But that benefit remains narrow, as narrow as Tuesday afternoon’s higher highs. The rubber band is still stretching.[/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.