Trading Plan for 3/6

If watched pots never boil… then it’s surprising that Wednesday’s session ever simmered. The morning swung widely from support to resistance and back again — and again, and again. That attracted onlookers, who held their break each time the range’s lower-end was revisited, gripping their seat arms tighter, preparing for that obvious break lower, when… oh, the suspense… a slight bounce back into the range ended the session essentially flat on the day.

Pattern points… (Setups and technicals)[pay]
Behavior since Tuesday morning touched 1870.00 has continually suggested that the rally’s sponsorship is waning. Higher and higher intraday probes that returned to or through 1870.00 reflected distribution. Wednesday’s ranging above 1870.00 probed only one higher high. And it wasn’t much higher, so it wasn’t really rejected. But it wasn’t accumulation.

The contradictory influences persist into Thursday’s session. Waning sponsorship among buyers, tepid responses by sellers. There remains a vulnerability to probing fresh highs, and a vulnerability to rejecting a probe of fresh highs. Breaking lower first would be credible, and could be productive, but not necessarily durable.

Like delaying a break until later in the day, delaying it until later in the week makes it less durable. Especially this week, with Friday’s pre-open Employment Situation report looming. Thursday afternoon trending would be suspicious, and less reliable to extend than would a breakout Thursday morning, which would already be suspicious.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Currency volatility on the pre-open ECB and BOE statements should affect Gold and Crude Oil. S&Ps often duck the volatility, as other markets funnel the steam. Be prepared to fade extremes that aren’t breaking decisively.[/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.