Trading Plan for 4/6

[pay]About that close (How the prior session ended)
The open’s rally from 1174.50 to 1183.75 peaked before 11:00am. The balance of the session ranged narrowly, holding the morning’s 1181.25 bias-up signal as support. Monday’s last hour looked much like the afternoon as a whole. Both 1-minute and 3-minute RSIs avoided overbought and oversold territory, so there wasn’t even any sponsorship for trending

Pattern points (And technical influences)
The morning’s original test of 1181.25 was underwhelming. Despite surging nearly 7 points, the 15-minute grace period was barely invoked. Higher highs waited until well after signaling a no-bias environment. And then, of course, there’s the narrow five-hour trading range.

It all sounds so complacent, but it was really optimism. The same optimism slowed the overnight rate of descent and kept it shallow. The same optimism saved the open’s spike down from dipping just 3 more ticks to fill the gap back to Thursday’s close. And it avoided pullbacks from Monday’s new high, keeping the ranging narrow.

Nevertheless, the optimism did hold new highs suggesting that sellers are waiting for higher highs. That potential is still 1185.50, 1187.25 or 1193.25. Retesting Monday’s oversold RSIs at 1174.50 first would suggest the rally had already peaked, but dips should otherwise recover from testing 1179.00.

Bottom line (My underlying premise)
The complex triangle pattern depicted in yesterday’s Trading Plan is still operative. New highs should not justify complacency. The pattern opens a window to reacting down, and a reaction down at this stage of the pattern could be impressive.[/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.