Trading Plan for 4/14

Try, try again… Wednesday’s false start retraced almost enough to renew the recent decline. It certainly didn’t give buyers traction. So long as Thursday’s session doesn’t just range narrowly, any trending into Wednesday afternoon could persist into the weekend. [pay]

Pattern points… (Setups and technicals)
Tuesday’s test of the 1307.50 target held. Twice. So did Wednesday’s. If it is valid as support, then it should attempt another rally Thursday. And if it is valid support, then the rally attempt should extend through Wednesday’s 1318.75 pre-open high. Try, try again.

Wednesday’s pre-open rally was undermined by unfinished business under Tuesday’s 1305.25 low. A fresh low Wednesday was optimistic, piercing Tuesday’s low by only 1 tick, and stopping just 2 ticks short of even touching the 1304.50 unfinished business. Try, try again.

The drop into Wednesday’s futures close found an air pocket down to 1308.50. That was a healthy 61.8% retracement of the rally from session lows. An immediate rally would be credible. It would also leave unfinished business below. That could be satisfied by dipping overnight or early to new lows. And that could be bullish if recovered early, too.

Of course, new lows would be exposed to sellers gaining traction and resuming the decline. This would be all the more possible if Thursday’s open doesn’t rally immediately. That’s what it will take to negate Wednesday’s expiration indicator, which suggests that sellers are in control through Monday’s open.

What’s Next… (Outlook and opportunities)
The unfinished business below Tuesday’s low was 1304.50. Having been attacked so close by Wednesday’s low, it’s probably no longer relevant. Fresh lows should touch at least 1303.00. Almost any lower would essentially target 1281.00. A rally would require almost immediate recovery of 1313.00.

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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.