Trading Plan for 4/8

If this pattern is anything like the others it’s tracking… then this week won’t be anything like the bounce that preceded it (which was shallow). Or, like the interim dips that preceded the bounce (which were temporary). .

Pattern points… (Setups and technicals)[pay]
Monday’s last hour differed from Friday’s. Instead of ranging sideways, it ended lower than where it was entered. It also ended under within the bias environment but under the noon hour’s range. So, buyers gained no traction for their effort, but sellers had room for improvement.

Also undermining buyers was the late-afternoon short-squeeze setup. Fresh lows during the bias environment, entering the final hour above the the bias environment’s highs… that could have been substantial. But it was never squeeze-like, and it failed entirely.

The close retraced 61.8% of that late-afternoon rally. And no more. It also didn’t react up from there before the close. Like Friday, all available selling pressure was expended, but vulnerable sellers weren’t exploited. It merited a hold-short setup.

The bigger picture has returned back to prior lows. There was no reason for yet another return visit, other than to extend down. A corrective bounce back into the range, first, is possible, regardless of how much more bearish the overall resolution becomes.

[/pay]What’s Next… (Outlook and opportunities)[pay]
A bounce has a lot of room to run before suggesting the trend might be reversing up. Often the market will take advantage of that opportunity to refuel. Being a correction, it will have to be signaled before becoming any likelier, but not extending down immediately Tuesday would make a corrective bounce likely.[/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.