Trading Plan for 7/24

If Wednesday’s Expiration Indicator had any effect… on Monday’s session, it was mostly overnight. Sharply lower lows at the open may have been a function of the same strong hands distributing — the morning’s recovery did not probe above the open’s highs, that came later.

Pattern points… (Setups and technicals)[pay]
Despite recovering from 1332.00 up to 1348.50, buyers gained no traction for their efforts. Probing above the noon hour’s 1342.75 high required either exiting the bias environment at 2:30 above it, or entering the final hour above it. Both were still testing 1342.75.

Sellers didn’t regain traction through the 3:10-3:20 window, and the afternoon’s 1346.25 bias-up target remained outstanding. A surge up to 1348.50 fulfilled it. But it also gained no traction.

Buyers don’t often gain traction from negative territory, and Friday’s close was 1358.50. Closing above 1346.50 could have triggered a multi-session rally, and that signal would have been very surprising. A multi-session rally signal is now off the table.

So, a lot of buying pressure has been expended, neutralizing several retracement objectives above, without putting into play any higher objectives. Holding short overnight was avoided by the last half-hour ranging around 1346.50 instead. It did break lower to 1343.25, but not until within 3 minutes of the close.

Unfinished business below at 1332.00 remains outstanding nonetheless. Rallying above 1349.25 through Tuesday’s open would extend the detour back up to Friday’s “higher prior lows” at 1357.50.

[/pay]What’s Next… (Outlook and opportunities)[pay]
A brief fresh high overnight testing 1349.25 remains possible. Its rejection back under 1345.50 would signal a downleg ready to begin. Regardless of the timing of its origin, a valid downleg at this stage should begin by being steep and substantial, or it may not be valid.[/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.