Trading Plan for 3/6

A Monday sell-off, that wasn’t recovered… that’s new. At least, new for this cycle. Otherwise, Monday dips in an uptrend are more easily recovered. So, either this recovery is delayed, or else, the drop is a glimpse of things to come…

Pattern points… (Setups and technicals)[pay]
Not only did Monday’s open break under 1362.00-1364.00, but it broke lower long enough to renew the bias-down signal. Not that its 1355.50 renewed bias-down target was met (let alone the room around it for noise down to 1353.75). But the pattern that put 1355.50 into play was not rejected.

1362.00-1364.00 was not recovered through Monday’s open, despite being tested as resistance. The afternoon bounce’s sponsorship gained no traction for their effort. Extending higher Tuesday should require gapping up above 1366.50. Testing 1366.50 without gapping up would be likely to hold, and perhaps also to fail.

Meanwhile, a dip that tests below at 1360.00-1361.00 could act as support to launch a bigger bounce Tuesday. Probably only a temporary bounce, but a bigger bounce than Monday afternoon’s.

The only direct path down may be to gap under 1359.00. Under 1355.50 through a relevant timing window would put into play 1350.25, whose break would trigger a much bigger and extended downleg.

[/pay]What’s Next… (Outlook and opportunities)[pay]
While the pattern remains much more vulnerable to resolving down than up, not resolving down Monday did open a very big door to bouncing Tuesday. That bounce would likely be relatively shallow, and likely to resume the decline Tuesday afternoon or Wednesday. Absent gapping sharply either up or down, Tuesday’s session is unlikely to range.[/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.