Trading Plan for 4/18

If the potential for retesting last week’s highs is done… then the next downleg should be obvious Thursday. And obvious means both slope and degree being steep and substantial.

Pattern points… (Setups and technicals)[pay]
Two or three significant objectives were tested during Monday morning’s bias environment decline — 1548.50-1549.25, 1543.00-1544.00, and 1542.50. It was the last one whose break through a relevant timing window would have entered the destructive phase.

1542.50 held.

It was also tested during the afternoon’s bias environment, and during the last 60-90 minutes. It’s so rare for so many relevant levels to be tested during one timing window that the balance of the session was unlikely to continue ranging among them. Yet, it did.

Closing back above the all of the objectives would have signaled their tests were absorbed. Closing back above them would have been likely to close well above them. But the highest of them at 1548.50-1549.25 held yet another resistance test at the close. Sellers were not absorbed.

Meanwhile, the objectives are relevant from before the recent Employment Situation reaction that opened below all of them. Its low was the product of impatient buyers, as was Monday’s attack, and now Wednesday’s attack, too. Rejecting these objectives again by essentially gapping up Thursday above 1555.50-1556.25 could once again delay the inevitable. But resuming the decline from closing this low would more likely bring it on.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Wednesday’s expiration indicator triggered a passive bullish signal, by probing under Monday’s prior low and closing back above it. It’s suspicious since that low was made so briefly, and Wednesday’s recovery back above it was so shallow. Thursday’s open will either confirm or invalidate it.[/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.