Trading Plan for 7/23

Saturday Strategy Session… begins at 9:30am ET. Its link is found in the blog’s sidebar. See you there!

Pattern points… (Setups and technicals)[pay]
Thursday night’s sell-off didn’t extend very much lower Friday. But it maintained breaks under relevant supports. Friday afternoon’s probe of fresh lows didn’t extend lower at all. But it didn’t recover above a relevant resistance.

It’s not excessive pessimism if sellers gain traction for their efforts. A deep sell-off could fail to gain traction if a probe under relevant support isn’t maintained through a relevant timing window. Friday’s shallow extension down gained ground and gave back nothing. It is probably not finished.

Friday’s decline also left outstanding unfinished  business below at the afternoon’s 1353.50 bias-down target. And having fulfilled the first half of Wednesday’s Expiration Indicator Friday afternoon, Monday morning should also be characterized as a downward bias.

It is interesting that intraday RSIs avoided becoming oversold except for one time, during the noon hour’s attack on the 1357.00 target. RSIs diverging positively on its retest did not produce a bounce through the close. The drop’s sponsorship hasn’t broken a sweat.

[/pay]What’s Next… (Outlook and opportunities)[pay]
The next lower attraction at 1353.00-1355.00 is familiar. Too familiar. Its utility as support is now limited only to overnight activity. There is no bullish reason to revisit it. Not already recovering through the open from its overnight test would likely extend down considerably intraday.[/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.