Trading Plan for 3/26

[pay]Pattern notes.
Tuesday’s last-minute dive was rejected by the open’s gap up to 809’50 that eventually extended higher. The recovery was productive by probing new highs above 821’00. The plunge to 787’00 could have sealed a top had the session closed there, but it did not. Buyers would have gained traction by recovering 809’50, but it held as resistance. So did they accomplish anything other than dealing away the oversold situation?

Sellers played it smarter. Rather than expend energy to force a close under 787’00, they let a rally end the day. And rather than fight back at 804’00, they let the bounce extend. Finally the last hour’s recovery took on short-squeeze characteristics. The aggressive surge expended buyers’ energy, and neutralized any magnetic attraction back to 809’50.

The wide intraday range’s close back at the session’s open suggests the market is at equlibrium. The first trending attempt is likely to fail – not required to fail, but likely. The pattern is neither bullish nor bearish. Except that it is bearish for not being bullish on a day that probed new highs and recovered a steep afternoon slide.

Indicators and Internals.
RSI journeying from extreme to extreme showed little hesitation by buyers, and then by sellers, to express their opinion through order flow. The session’s wide fluctuation was not noise. Divergences were reacted to, and extreme readings were already retested, leaving no unfinished business either above or below.

Thursday’s opportunities.
An immediate recovery above 814’50 would signal that buyers were trying to retake the control, doing what they opted not to do one day earlier, and at a cheaper price. In other words, this will be difficult, and vulnerable to peaking under 818’00. Otherwise, An immediate break under 804’00 would signal that patient sellers were being rewarded for letting Wednesday’s last-hour rally retrace so much.[/pay]