Trading Plan for 4/14

[pay]About that close (How the prior session ended)
Tuesday’s probe into positive territory was brief, limited to a test of 1194.75 resistance. The close dipped to test the 1193.50 level, and then another point lower before INTC announced earnings – as deep as possible without letting sellers gain traction. INTC’s news triggered a gap up that probed Tuesday’s high to 1196.25.

Pattern points (And technical influences)
RSIs were simultaneously oversold at Tuesday’s 1185.00 low, requiring its eventual retest. The interim detour suggests that the retest will be in the context of a new downleg, and not just to neutralize the attraction.

Meanwhile, Tuesday morning’s first four checkpoints were each a test of 1121.25 where the cash session opened. Having recalled the morning’s steep drop, it should be expected to attract price back down, too.

Which leaves one piece of business above, Sunday night’s 1198.50 high. It’s not “unfinished,” because it doesn’t require a retest. Its retest would have been in-play had Tuesday’s probe of Monday’s 1195.75 high closed higher instead of holding. But a retest of 1198.50 nonetheless would target either 1200.00 or 1201.50.

A window remains open for starting a new downleg. It’s not open very wide, but it is very high up. Whether as a rejection of early strength, or as early weakness, Wednesday’s session needs to leap out of that window to maintain the topping pattern.

Bottom line (My underlying premise)
After nearly a week with few high-profile econ reports, the calendar gets busy Wednesday. It also finds more high-profile earnings coming before the open. Buyers still haven’t gained any traction since Friday’s late surge – in fact, the surge was retraced to Friday afternoon’s lows. If buyers can’t exploit the setup within a day, then sellers are just getting started.[/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.