Trading Plan for 3/3
If the tanks weren’t rolling by Friday’s open… then the weekend was likely to be greeted at new highs. Actually, they had not rolled by then, so new highs were probed. But, then… Suffice it to say, we have plenty to discuss in this weekend’s Saturday Strategy Session.
Pattern points… (Setups and technicals)[pay]
Friday afternoon’s bias parameter was instructive to Friday’s close. Its bias-up signal was still being overlapped at 1:20 to invoke the grace period. It was still being tested at 1:30 to trigger noN-bias. That wasn’t a sell signal, but it reflected weak-handed buyers expending valuable energy without gaining traction for their effort.
Similarly, the close was still overlapping Monday’s 1856.50 high. The bounce from 1845.50 had expended valuable energy back to the pivotal level, without gaining traction for the effort. The post-close surge to 1861.00 doesn’t have anything to do with strong-handed sponsorship.
That’s not a sell signal. And while it does make the market vulnerable to drifting lower without news, I doubt the weekend won’t bring significant developments. But it does make the market vulnerable to reacting much more aggressively to negative news.
Friday’s close may have gone a step further. A post-close surge extended up to almost 1863.00, where the afternoon’s sell signals had originally triggered. Too late to gain traction for its effort, and then applying more effort. Look out below if the rally doesn’t resume immediately at Monday’s open.
[/pay]What’s Next… (Outlook and opportunities)[pay]
Even extending the rally without delay Monday wouldn’t be immune to reversing down. Not that it requires being tested without a valid close above 1856.00, but there is room up to 1869.00. Testing it Sunday night or at the open would be extreme sentiment, and risk becoming a sentiment extreme. Oversold RSIs at the 1845.50 low could be retested intraday.[/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.