Trading Plan for 4/28
About that close (How the prior session ended)
Tuesday’s last hour began by rejecting the third and final consecutive push lower to 1185.75. Like the prior two, price quickly bounced back above its prior low. The entire 3:10-3:20 timing window didn’t trend up, but it did reach 1190.75.
The bounce could have extended. But five minutes later, 1190.75 was still being tested. This wasn’t necessarily bearish, except that this particular moment needed to be obviously bullish. It was not, so a 30-minute, 13-point dive down fell to 1177.50.
Pattern points (And technical influences)
Simultaneously oversold 1-minute and 3-minute RSIs at the late low launched a 5-point bounce. Futures ended at 1181.00, keeping alive potential to Tuesday afternoon’s 1175.50 bias-down target.
1175.50 is the upper-end of the Complex Triangle that ended March. The pattern can be probed down to 1170.00 and still be capable of recovering for a corrective bounce. Any lower would be likely to extend down to the pattern’s minimum objective at 1156.50.
As for that corrective bounce, it should be remembered that Tuesday’s plunge originated during a no-bias environment. No-bias trending is always likelier to be retraced than not. This one is less likely, since Tuesday morning’s bias environment was exited under its 1198.50 bias-down target. But its potential can’t yet be counted out.
Recovering an early dip Wednesday to 1175.50, or opening above 1193.50, would interject a bounce. Anticipation ahead of FOMC news coming in the afternoon will be an interesting influence.
Bottom line (My underlying premise)
New sponsorship might arrive and extend the decline. If so, the decline will extend in a very big way. Sellers might refuel first, but it’s not necessary. Thursday’s 1186.25 low required a retest because oversold RSIs attract weak buyers. Printing new highs in the interim means the weak buyers have attracted some pretty heavy sellers.
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.