Trading Plan for 3/26

If a gap up’s rejection ever closes back under a prior low… then that will probably be the end of that. “That,” being the ongoing and increasing distribution in this range. But the market still doesn’t seem ready to begin a downleg.

Pattern points… (Setups and technicals)[pay]
Tuesday’s gap up was entirely in-line with expectations for probing new highs. It was entirely in-line with the path higher needing to gap since Monday’s buyers gained on traction. But it was also entirely in-line with the recent rejections of gaps up.

This one came lower than others over the past 2-1/2 weeks, reaching only 1864.50 instead of the 1866.75-1874.00 range where others were rejected. This one came later, making it through the 10:15 bias timing window instead of already reacting down by then. And this one increased the frequency, being a third consecutive gap up, and rejection.

But this one also avoided negative territory, but for twice piercing Monday’s ~1850.00 close momentarily during the noon hour. And this one recovered through the afternoon, not to new session highs but back to the 1859.00 gap up. Extending higher immediately still requires gapping up Wednesday. But sellers failed again to gain traction.

[/pay]What’s Next… (Outlook and opportunities)[pay]
An overnight dip could test 1855.50 and recover back above Tuesday afternoon’s 1861.00 highs to already suggest another gap up is likely. A deeper dip could test 1844.00-1846.00 and still not signal a bigger downleg underway.[/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.