Trading Plan for 4/17

Monday’s probe under Friday’s lows… remained under pressure long enough to leave unfinished business below. Between that and the gap back to Tuesday’s close, rallies would be suspicious.

Pattern points… (Setups and technicals)[pay]
Overbought RSIs at Monday afternoon’s 1371.75 high initially inhibited the afternoon’s bounce from being rejected to resume the decline. The afternoon’s bias environment had been exited above the noon hour 1367.00 highs, which also suggested that sellers may be marginalized.

But a late dip tested 1365.00 into the cash session close anyway, and fell to 1363.00 before the futures close. The overbought RSIs printed above the afternoon’s bias-up signal, during a no-bias environment, undermining its ability to undermine sellers.

Regardless, it’s still a very bearish scenario, likely to resolve down and resume the bigger decline. Monday afternoon’s overbought RSIs could be neutralized by testing 1371.75 overnight, and already be in decline at Tuesday’s open.

The likely alternative to rallying at Tuesday’s open would be gapping down to last Tuesday’s 1353.50/1357.00 close(s). Not gapping down Tuesday, and not yet retesting 1371.75 above, could trend up to 1375.00 or higher through the morning.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Attempts to renew the decline could be tried indefinitely, but typically two or three consecutive tests of support rally into at least a brief detour above. Time is growing short for the current attempt to resolve down without producing a bigger bounce. [/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.