Trading Plan for 3/29

Monday’s opening strength never behave appropriately… But it took all morning for its retracement to arrive. No bounce from there behaved appropriately, either. And it took all afternoon for its downleg to begin. Each drop compensated for its delay. But so far, they’re just two more ill-timed downlegs, yet to gain traction. [pay]

Pattern points… (Setups and technicals)
Monday’s late plunge from 1310.00 perfectly fulfilled its description for being steep and deep. But it originated in the session’s last half-hour. This is not where strong hands flex their muscles.

The drop fulfilled its minimum target at 1304.50 after the cash session close, and nearly touched the 1301.50 objective. Regardless of timing, a lot of selling pressure was fulfilled. And sellers gained no new traction because the cash session closed above targets. It’s a loophole.

Oversold RSIs at Monday’s late low predicted any bounce would fail until retesting the 1302.00 low while RSIs improved. More post-close action did retest 1302.00 while RSIs improved.

Sponsorship of Monday’s late plunge is not capable of launching a durable drop, its target has been met, and technicals are improving. New sponsorship can launch a more substantial downleg either by extending down without delay, or by absorbing an opening bounce.

Immediately retracing Monday’s late plunge back above Monday’s afternoon’s highs would essentially be as if it had never taken place. Except for one thing – buyers would be refueled and rallying.

What’s Next… (Outlook and opportunities)
An overnight or opening bounce has room up to 1307.75, or to 1310.50 without a bigger upleg starting to gain traction. A bounce could play out overnight, or through Tuesday’s open. Regardless of a bounce’s timing, and regardless of their being any bounce, fresh lows under 1300.25 would signal the next downleg underway.

An overnight bounce that isn’t rejected would start to gain traction above 1310.50. Opening above 1312.75-1313.50 would signal a new upleg underway. It could also marginalize sellers through mid-week, with potential to 1338.00. [/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.