Trading Plan for 7/17

If WedEX were any less decisive… then it wouldn’t have triggered, at all. That can be rectified by Thursday’s open gapping up or down sufficiently. Otherwise, there is still an influence expected on expiration.

Pattern points… (Setups and technicals)[pay]
Wednesday’s retest of July 2’s high was higher than Tuesday’s test. But it still qualified as stopping pessimistically short of an actual high, despite having come so close. This is the basis for a passively bearish WedEX. To be actively bearish, the WedEX setup would have also closed negative, especially after probing a new high intraday.

Thursday’s open can serve by proxy, but it must do more than was required at Wednesday’s close. So, closing Wednesday above July 2’s 1978.25 high would have been actively bullish, but now gapping up Thursday above 1981.25 would be required. Closing negative under 1968.00 would have triggered an actively bearish WedEX, but now gapping down Thursday under 1965.00 is required.

WedEX influences Friday afternoon and Monday morning price action. That leaves Thursday the opening to probe a new high, and to reject it. Trending down into and out of the weekend would leave no unfinished business above. Just ranging sideways isn’t very likely at this stage of the pattern, but trending down without first probing a new high isn’t much likelier.

[/pay]What’s Next… (Outlook and opportunities)[pay]
S&Ps already dipped after the cash session close, back down to 1971.50. That was a critical level Wednesday (the morning’s bias-up signal, and the 11:30/noon prints). A line in the sand is being dug, and attempts to trend away from it should be retraced.[/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.