Trading Plan for 3/2

Two days up, one day down… Hardly seems fair, but another up day would have seriously undermined last Tuesday’s trend change signal. Hovering narrowly Tuesday wouldn’t have helped. A significant drop unleashing pent-up selling pressure keeps the trend change signal alive. [pay]

Pattern points… (Setups and technicals)
Ahh, Thursday’s cash session close. The memories. The afternoon’s recovery conserving energy by not probing the morning’s highs, the last-minute bullish Falling Wedge, futures extending down further to create a bullish vacuum.

None of which made Friday’s gap up bullish. Or its refusal to turn negative intraday. As was noted then, gapping up is no way to start a durable recovery.

Anyway, the reason I mention the gap back to Thursday’s 1305.25 cash session close is because Tuesday’s drop filled it. Both of the interim sessions were retraced entirely, along with Monday night’s temporary rally to 1336.50.

This is an inflection point. Either another bounce begins Wednesday morning, or the trend change signaled last Tuesday resumes with a vengeance.

What’s Next… (Outlook and opportunities)
Tuesday’s 3:10-3:20 timing window trended up, and no prior high was recovered. No matter how bearish things seem – even the Globex session already extending down to 1297.50 – beware of recovering 1309.00-1310.00 through Wednesday’s open. Otherwise, the decline remains intact and next targeting 1289.50 and 1282.50. [/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.