Trading Plan for 3/30

[pay]About that close (How the prior session ended)
Occasionally after an unchanged open, the market stays unchanged. Price still fluctuates away from unchanged, but it then returns to unchanged at almost every relevant timing window. Very often this setup tells us very early (like, in the first 15 minutes) that trending is unlikely until the last hour, if at all.

Monday’s open gapped up, and then started retracing into each passing checkpoint. The open’s gap up didn’t make trending unlikely, just more difficult. But it did make the last hour likely to trend. And it didn’t.

Pattern points (And technical influences)
Monday’s extended narrowing range could have neutralized one side or the other before the close. A last-hour trending attempt, with no time to be undone, could have avoided a false breakout and reversal. Instead, Tuesday’s session will be greeted not just with both pent-up buying pressure, but also with pent-up selling pressure.

The first trending attempt from an extended narrowing range tends to be false, and soon retraced, reversing more substantially in the opposite direction. A breakout attempt below 1163.75 or up to 1172.25 would likely reverse sharply.

It’s actually not too late for Monday’s close to let the steam out of one side or the other. A gap beyond either end of the 1163.75-1172.25 range would serve by proxy, so long as the gap quickly became trending.

Bottom line (My underlying premise)
Whether up first, or down, the target would be a retest of the recent 1176.25 high or of the 1156.50 low – by a 3-5 point margin. That’s not trending, it’s ranging, and that’s more of the same price action as last week. If trending is going to be a factor during this holiday-shortened week, then it should announce its presence by Tuesday afternoon. Monday’s gap up was not that announcement.[/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.