Trading Plan for 4/7

[pay]About that close (How the prior session ended)
Tuesday’s last action was to retrace the afternoon’s no-bias trending. FOMC’s news had triggered a rally from 1183.25 to 1188.00. That was retraced back down to the morning’s 1184.50 high.

The late action also tested 1185.50 as support. This important target was hardly acknowledged on the way up. It deserved recognition, so after dipping under it, Tuesday’s last half-hour ranged narrowly around it.

Pattern points (And technical influences)
In fact, both Tuesday’s cash and futures sessions closed within 1 tick either way of 1185.50. Virtually no pattern allowed a downleg prior to somehow visiting 1185.50. It was tested. It was probed. And it ultimately held and defined the close.

Last week’s interim consolidation between its two highs formed a Complex Triangle. Its 1193.25 target can still be met intraday. If not rejected suddenly by a steep and substantial drop, then a much more substantial rally is underway.

Bottom line (My underlying premise)
The past two sessions opened lower and held critical support, then triggered buy signals that extended much higher. Third time’s a charm? Yes, and no. More likely is that the Pavlovian response prevents an initial dip. An opening surge is vulnerable either to extending up sharply, or else to reversing down sharply. So likely is an immediately gain to new highs that its failure to appear would be very bearish. [/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.