Trading Plan for 3/6

If Tuesday’s rally had not started so strongly… then its higher close could have been the product of trending up throughout the day. But it gapped up sharply and tried extending higher without a pullback, repelling its sponsorship into the close.

Pattern points… (Setups and technicals)[pay]
The same leg fulfilling the 1526.00 objective was likely also to fulfill the longstanding 1533.00 objective. It did, and then some. Exceeding 1533.00 through 9:45 was likely to renew the bias-up next targeting 1541.00. It was fulfilled, and then some.

The rally might have been better served by leaving a higher objective outstanding.

Instead, the session high printed during the afternoon’s bias environment, and the close was under the noon hour’s low. This means buyers gained no traction for their efforts. It would be helpful if some unfinished business were left outstanding to attract price higher, but it has all been neutralized. And then some.

There is one opportunity to extend the rally. Closing above 1533.00 essentially puts into play 1553.50, if not also 1575.00. This is already undermined by not closing above 1542.25 despite testing it intraday. Nevertheless, a second consecutive close above 1533.00 (not necessarily a second consecutive higher close, or even above 1542.25) would at least confirm a new upleg is underway.

[/pay]What’s Next… (Outlook and opportunities)[pay]
If the trend intends to reverse down, nothing requires that it be immediate. A durable top shouldn’t form until dipping back under the 1523.50-1530.00 “lower prior highs” and then bouncing to test Tuesday’s 1532.25 opening gap. That doesn’t mean a sizable downdraft can’t occur meanwhile.[/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.