Trading Plan for 3/7

If buyers have further entrenched the rally… then a drop back under last week’s highs would be likely to recover. But can the rally not extend higher without refueling?

Pattern points… (Setups and technicals)[pay]
Wednesday’s second consecutive close above 1533.00 (basis Mar, 1528.00 basis Jun) puts into play a higher objective at 1553.50. (1548.50 basis Jun) This is not an accumulation pattern breaking higher, so a detour down can refuel buyers and very likely recover.

Wednesday afternoon’s false attack on the morning’s 1544.75 (1539.75) high was a little odd in that it did not extend higher. Its reaction was essentially still testing 1539.50 (1534.50) through the close, so sellers didn’t gain any traction for preventing the afternoon rally. Odder, still

The afternoon’s surge’s failure made Wednesday’s close settle back under 1541.00 (1536.00). Since being the target which contained Tuesday morning’s surge, it has been influential through every timing window. Buyers gained no traction for the second consecutive session.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Wednesday’s session did reflect “ineffectual optimism.” The open gapped up, the entire session was spent in positive territory, and prior highs were probed (all optimistic) without extending higher (ineffectual). This setup is often followed by a near-term drop, unless new highs were maintained through the open. [/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.