Trading Plan for 3/31

[pay]About that close (How the prior session ended)
Tuesday’s last hour ranged narrowly at afternoon highs, attacking Monday’s highs, and ultimately failed to improve. RSIs diverging positively at the 1166.00 afternoon low had created potential to 1170.50, which held two tests as resistance. Trending through 3:10-3:20 would have extended into the close – either above 1171.00 or under 1168.50. Instead Tuesday’s last 90 minutes bounced from one end of this range to the other. The opportunity was there, but it was not exploited.

Pattern points (And technical influences)
Having touched both ends of the 1168.50-1171.00 range makes the next trending attempt likelier to extend, even if only 3-4 points before hesitating. This measurement presents two interesting scenarios.

The first scenario is a 3-4 point drop targeting Tuesday afternoon’s 1166.00 low. Its immediate break at Wednesday’s open could trigger a session-long decline – it’s not an ideal setup since the last-minute action didn’t bounce. Regardless, having missed the Tuesday deadline for retaking control, this scenario would serve by proxy for sellers to retake control before they’re marginalized ahead of the three-day weekend.

A second scenario would gain 3-4 points to retest Tuesday morning’s overbought RSIs at 1173.75. The overbought readings developed during a reaction to news, so its retest isn’t required. But potential for its retest remains alive so long as price remains within its orbit. And Tuesday’s close was as far as possible from 1173.75 without decisively leaving its orbit.

Bottom line (My underlying premise)
Monday’s gap up, probe of prior highs and entirely positive session never extended, which was ineffectual optimism. It still recovered Friday morning’s post-open low. But Tuesday’s session already exploited this bullish element when sellers failed to gain traction. Despite the extra day – and despite Friday’s low having fulfilled near-term selling pressure – buyers haven’t gained traction since Monday’s open.

Rally attempts into the weekend are possible, but aren’t likely to evolve into a new upleg. Even if marginalized, sellers could still trigger trending efforts, but not necessarily, and their efforts would likely recover. In either case, there’s still one small window open for sellers to regain traction, and it would have to be obvious overnight.[/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.