Trading Plan for 3/29

Wednesday’s drop suggests that… the retest of last week’s high is Double Topping. Only one or two more pieces of evidence needed…

Pattern points… (Setups and technicals)[pay]
Sellers behind Wednesday’s downtrending session did not gain traction, since the afternoon’s low was recovered back above the noon hour’s highs. That doesn’t mean buyers gained traction to prevent a bigger bounce. But a bigger bounce would still have to prove it is not just a temporary correction.

Despite sellers gaining no traction, a decline can be extended by gapping down. Probing under Wednesday’s low deeper than 3 points would be vulnerable to extending down another 30 points.

Even the most bearish resolution could bounce first to retest last week’s high one more time. This week’s high could be probed temporarily, too, but not without becoming vulnerable to resuming the rally.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Two days spent retracing the rally from Friday’s low, have culminated in a test of “lower prior highs” that filled an outstanding gap. And these neutralized attractions below produced reactions back above the noon hour’s high. If that is not sufficient for a bigger bounce, then big selling pressure is already coming down the pipeline.[/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.