Trading Plan for 3/4

If Wednesday morning isn”t trying retest the highs… then a new downleg may be underway already.

Pattern points… (Setups and technicals)
Monday rejected the Thursday-Friday “ineffectual pessimism.” Two days spent exclusively in negative territory, testing prior lows, but not trending down, followed by a close above both. But that didn”t prevent Tuesday from probing under both.

Prior lows held, as they had Thursday-Friday. Described another way, prior lows were further chipped away, without yet breaking lower.

Still topping, or already topped?

Tuesday was more ineffectual pessimism. Gapping down, spending the entire session in negative territory, and probing under prior lows, but only intraday. The topping pattern that began last Tuesday, and which was confirmed last Wednesday, hasn”t yet launched a downleg. 

But it”s vulnerable.

Regardless, last week”s high is still likely to be retested. Opening only slightly lower Wednesday, flat and firming, or gapping up — an intraday rally would remain likely. But trending down through the open, triggering bias-down, would suggest the topping is complete.

What”s Next… (Outlook and opportunities)
Wednesday”s econ calendar is swamped, into and out of the noon hour. Even before then, Yellen speaks overnight. Reaction to ADP helps us to anticipate Friday”s reaction to payrolls. More Fed speakers into the noon hour are followed by the Beige Book release.