Trading Plan for 3/26

If Monday’s reaction down from the overnight highs was refueling buyers… then the close should have recovered above a relevant resistance. Several relevant support levels did hold, but that doesn’t form a solid launch pad.

Pattern points… (Setups and technicals)[pay]
Monday afternoon’s bias environment exit was positioned to recover the noon hour highs, but that failed. The final hour’s entry had time to recover, but it didn’t. None of which would be important otherwise, except that either setup would have triggered a substantial short-squeeze. That short-squeeze would have suggested the morning’s renewed bias-up — which failed — was back in-play.

A short-squeeze also would have helped to invalidate the noon hour’s complete retracement back to Thursday’s 1539.25 close. Recall that was last week’s low close, late in the week, following two significant rally efforts in the interim. It is that low close which has kept us skeptical about a new rally leg.

And now three rally efforts have been rejected — including Sunday night’s most productive rally yet, to new highs at 1560.50.

Monday morning’s renewed bias-up could be resumed, in essence, by recovering at least 1550.50. But the alternative to rallying Tuesday morning is probably to be decline. Monday afternoon’s action should have finished with any ranging sideways.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Tuesday’s econ reports alone present a very unusual obstacle course, not including any Eurozone headlines that might come from nowhere. Knee-jerk reactions don’t seem to be gaining traction, so we’ll be suspicious of any sudden trending… Happy Passover to those who are celebrating Monday evening.[/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.