Trading Plan for 6/17

If the multi-session decline influenced Monday morning… then the afternoon ranging suggests that a rally is waiting for one more flush. Not that another sell-off attempt need be substantial, or lengthy, before its recovery can be considered bullish. Just an opening dip would suffice, preferably neutralizing unfinished business below and suddenly reversing up.

Pattern points… (Setups and technicals)[pay]
Unfinished business below is limited to the oversold RSIs at 1922.75 where Monday morning’s bias environment was exited. With enough wind at its back, last week’s 1917.50 low could be tested, too. Gapping down just deeply enough and THEN probing fresh lows would help to expend buying pressure without leaving unfinished business below.

Leaving unfinished business below wouldn’t necessarily prevent a rally back to prior highs. It would require the rally back to prior highs to be relentless so that the unfinished business doesn’t attract price down.

Since buyers gained no traction Monday, gapping up to and/or through Monday’s highs is probably the only way to avoid fresh lows at all. Back above 1931.00 and extending through 1933.50 would leave behind oversold RSIs and a gap, but their relevance would still help the high’s retest to hold.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Wednesday’s FOMC decision shouldn’t be very influential Tuesday, at least not Tuesday morning, and not directly. Since it is likely to influence Wednesday morning’s price action, the period before then can accelerate breakouts and reactions ahead of the inhibition. So, steep legs are 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.