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Trading Plan for 3/2 – If, Then… Market Timing

Trading Plan for 3/2

By Rod David | February 27, 2015 - 4:54 pm

If we”re certain of Monday gapping down… then a hold-short through the weekend makes sense, right? Not necessarily. The potential reward has to outweigh the risk, and not just match it. Monday”s potential to gap down aside, the degree wasn”t much greater than the gap up target.

Pattern points… (Setups and technicals)
Despite spending two consecutive days in negative territory, and despite selling gaining traction for two consecutive afternoon, the topping pattern hasn”t yet triggered.

A downleg would be more credible if begun AFTER first retesting the overbought RSIs at Wednesday”s 2117.75 high. At least, a downleg could be more substantial, and not limited to either 2095.50 or 2088.00.

Starting the new week by rallying back to Wednesday”s high is likely to begin by gapping up. Probing lower first would be vulnerable to melting down, but unlikely.

What”s Next… (Outlook and opportunities)
We”ll review the broader market setups and any stock chart analysis requests at this weekend”s Saturday Review. Click here anytime within 30 minutes of its 9:30am ET start.

Posted in Market Wrap, S&P