Trading Plan for 3/31
[pay]Pattern notes.
Monday’s session-long decline almost lasted session-long. Then the last hour’s retest of the 776’25 target held, producing a bounce back up to the morning’s 780’25 low. The bounce became bounces, and bounces chipped away at 783’00 resistance. It was still being chipped away a the close, opening the door to an overnight bounce, instead of chipping away at 780’25 to resume the decline.
The session low picked an odd time to appear. It wasn’t an odd price or setup, just the timing. New session lows had been delayed until after the noon hour, so sellers didn’t need to be refueled. Refueling could have waited for a break under 776’25 to reach lower targets at 767’00 and 762’00. They’re still likely to be back in-play, so long as Tuesday’s open doesn’t immediately recover and/or extend through 798’00.
Just gapping above 791’00 – especially above 795’00 – would make pullbacks unlikely to turn negative, or likely to recover from negative territory. If sellers become so marginalized so early, they probably won’t be a factor through Wednesday’s open. Any less buying pressure would remain vulnerable to resuming the decline, next targeting 767’00 and 762’00.
Indicators and Internals.
1-minute RSI diverged positively into the bottom at Monday’s low. And that was pretty much it. The 3-minute RSI made a higher low, but had never become oversold. Higher lows among MACDs weren’t very impressive. There wasn’t much improvement into the last hour’s rally, making it vulnerable to a complete retracement.
Tuesday’s opportunities.
Two econ reports are due 15 minutes and 30 minutes after the cash session open, timing that tends to accelerate or to reverse any initial trending. No other shoes or auto companies are expected to drop, so attention should begin turning to Friday’s Employment Report and quarterly earnings (and mark-to-market). The market will either crouch fearfully ahead of either event, or rally in optimistic anticipation. But a retest of last week’s highs isn’t at all likely if not well underway at Tuesday’s open.[/pay]