Trading Plan for 4/9

If Wednesday’s confirmed trend change signal is done… then where is its bottom? Rallying relentlessly since Friday’s open doesn’t change that its gap down under prior lows wants to be filled. And the relentless rally is no more durable simply because its price action continues to be the same excessive optimism as at Friday’s lows.

Pattern points… (Setups and technicals)[pay]
Anything bullish done by Monday’s low-volume rally was done too late, or too little, to consider it being anything more than a temporary correction. For example, waiting until Monday to extend above the 1546.00 “higher prior lows” that held Friday allowed the corrective bounce to test the 1557.50 last “prior high” without gaining traction for the effort. Monday’s cash session close was testing 1557.50.

By the same token, waiting until after Monday’s cash session close to extend 3 points above 1557.50 was too late to gain traction.

The gap back up to Thursday’s 1554.50 close wasn’t tested until Monday’s last half-hour, too late to be relevant regardless of extending higher. Recovering from a reaction down would have reflected accumulation. But Monday’s pattern reflected un-refueled extension.

Monday only left outstanding more unfinished business below. The afternoon’s “no-bias trending” above the 1550.50 bias-up signal will require being retraced. When delayed for at least a timing window, the eventual retracement tends also to test what was the 1:20 print, or 1548.00, if not lower.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Often, no-bias trending is not retraced for at least two sessions when it is not retraced in the same day. Unless Tuesday morning’s bias environment were to begin or contain the dip, sellers could be marginalized as late as Wednesday. So, the likelier path down would not be delayed. [/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.