Trading Plan for 7/14

If not for dipping before Friday’s open… then would the cash session have trended down? The morning delayed recovering until the afternoon, but sellers tried to get things going. Did they fail because so much sponsorship had been satisfied already?

Pattern points… (Setups and technicals)[pay]
Friday was simple — at least, in staking out its objective. Holding a test of the bias-down signal put into play a test of the bias-up signal. The morning’s attempts to reject it all failed, and the afternoon’s rally pierced the objective by 3 ticks.

The morning’s “ineffectual pessimism” at support was matched by the afternoon’s ineffectual pessimism at resistance. Buyers were very patient. Ultimately they were rewarded, so their buying pressure was satisfied. They gained no traction for their effort, but left no impediment to attracing new sponsorship that extends higher Monday without delay.

Thursday’s intraday rally from gapping down was the product of ineffectual pessimism. There’s no reason why ineffectual pessimism on Monday wouldn’t fail, too. The best way for sellers to regain control is to relinquish it first — let a sudden and steep rally Monday produce new highs by Tuesday, in time for the WedEX indicator to close back under relevant support.

Trading down immediately Monday could still be credible for extending the decline. Any delay in trending down Monday is likely to resume the rally.

[/pay]What’s Next… (Outlook and opportunities)[pay]
After two weeks without, this weekend will have a Saturday Strategy Session. Follow this link (or find it in the blog’s sidebar) to be there at 9:30am ET. [/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.