Trading Plan for 3/6

If two days of buying pressure can”t prevent a fresh low… then who”s going to defend against a sell-off? Of course, it hasn”t been two entire days of buying pressure. But Wednesday”s downleg during its first 15 minutes was then retraced through the balance of the session. Thursday was spent almost entirely in positive territory. But neither effort gained traction. So, another downleg at Friday”s open would be difficult to absorb..

Pattern points… (Setups and technicals)
Gapping up Thursday was too shallow to be reliable for extending higher. Although it was rejected into negative territory, that proved only temporary. But spending the entire session in positive territory isn”t necessarily bullish, not when Wednesday”s 2099.00-2099.75 highs restrained every rally attempt.

The optimism is ineffectual. That”s not necessarily bearish. The next session”s early sell signal would be that much more credible. Rallying first would be that much likelier to reverse back down entirely. But each initial is as likely as the other.

Thursday”s session didn”t invalidate Wednesday”s break lower, and made it more difficult to be invalidated. What could have been achieved by gapping up a little Thursday must now be done by gapping up a lot. And there is upward traction that can be relied upon Friday to attract a recovery after initially trending down.

What”s Next… (Outlook and opportunities)
The monthly Employment Situation report is released pre-open Friday. And being a Friday, the morning”s bias signal is likely to persist through the noon hour. Being so near the highs, there is potential for a new high close, which would affect the topping pattern. The same Friday Factors could exacerbate an initially negative reaction down.