Trading Plan for 3/18

If Friday afternoon had recovered from probing a fresh low… then it would would have been “ineffectual pessimism.” The open gapped down, the entire session was spent in negative territory, and the prior low was probed — without closing below it. A temporary fresh low during the afternoon was the setup’s missing element. Too bad. That would have made the rally likely to continue Monday. Strike one…

Pattern points… (Setups and technicals)[pay]
Unlike Friday morning’s low, Thursday’s low was probed. Twice. Each was recovered before the timing window lapsed, but no prior high was recovered to gain traction for the effort. Probing the lows only chipped away at support. Strike two.

Thursday’s new high close was a breakout from several multiple prior sessions. Fresh highs overnight were not maintained, and Friday closed negative. Without a second consecutive higher close, the breakout is unconfirmed. Strike three.

The overnight high wasn’t much higher. And whatever complexity it had was subject to an errant tick that touched prior highs before extending higher. A “new Globex trend extreme” would have required being retested intraday, and help to prevent an immediate decline from extending. Strike four. This isn’t baseball.

Friday morning’s dip touched “lower prior highs” at 1549.25-1550.00 before bouncing back into Thursday’s range. The bounce filled the gap back up to Thursday’s 1552.50 open. Neutralizing its attraction above, which could otherwise have helped to prevent an immediate decline from extending. (All together now,) Strike five.

Finally, closing Friday above Thursday’s new trend high close would have ensured an eventual higher high, if not another new high close. (So does a new trend high on expiration.) Strike six.

Okay, fine. Two batters down.

[/pay]What’s Next… (Outlook and opportunities)[pay]
None of the above is a sell signal, but it puts a lot of performance pressure on Monday, the next batter. Perhaps only expiration prevented Friday from resuming the rally after the open’s surprise dive. Then Monday’s buyers should hit it out of the park to compensate for the delay, and to offset all of the strikes above. But probing fresh lows again would be another strike… [/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.