Trading Plan for 4/9

[pay]Pattern notes.
Dogs like to chase moving cars, but what happens if they catch one? Not much. The market is in a similar situation.

Friday and Monday’s lows each dipped under last Thursday’s 823’25 prior low, and each dip recovered. Sellers finally got what they wanted Tuesday by gapping down to new relative lows. So, how’s that working out? The session never recovered, and Wednesday’s session essentially ranged sideways, only to close 1 tick under last Thursday’s low.

Actually, labeling Thursday’s price action as a sideways range doesn’t recognize the overnight drop to sharply lower lows. So, does this make the break a success? In a way, for leaving unfinished business below (new Globex trend extreme at 802’25, oversold low at 803’25) that require a retest. These will inhibit a rally, but not necessarily prevent one.

Three consecutive sessions have now dipped successively lower under 819’00-822’00 without extending down. Tuesday’s low held a retest of its morning’s low, and Wednesday’s last-minute rally saved the day. The finicky selling can be easily exploited by the impending three-day holiday weekend which tends to add a bullish bias.

While awaiting retests of Wednesday’s pre-open lows, there might first be a visit to last week’s highs around 842’00, perhaps also probing Sunday night’s 848’00 highs. Opening above 828’00 Thursday would facilitate the move. To avoid this, or to avoid simply ranging sideways into the weekend, Thursday’s open must essentially gap under 819’00, and preferably under the cash session’s 811’00 low.

Indicators and Internals.
Late-afternoon negative divergence in the 1-minute RSI was accompanied only by weaker MACD. The 3-minute indicators never extended selling pressure on that particular move. An immediate drop would leave no unfinished business above, but there is no indication of a pullback at all.

Thursday’s opportunities.
The econ calendar is busier than normal with no news coming Friday. The highlight is Jobless Claims. Reactions were muted to Thursday’s expected announcements, and earnings could continue having more impact on price action. Failing an early rally effort wouldn’t necessarily launch into a sustained drop. But recovering from an early dip could still be vulnerable to reversing reversing up sustainably into the afternoon. Similar to a Friday, any initial trending is likely to persist through the noon hour.[/pay]