Trading Plan for 7/26

If Thursday’s recovery attempt fulfilled its objective… then Friday’s open will attract new sponsorship for either extending the recovery, or else for resuming the downleg. And this being a Friday, the morning’s bias signal could persist well into the afternoon.

Pattern points… (Setups and technicals)[pay]
The market wants to rally. Look out above if it does. Look out below if it doesn’t.

Wednesday’s sell-off tested the 1679.25 level whose break would have triggered a daily trend reversal. That was in the morning, with plenty of time to extend lower. But the opportunity was not exploited.

Thursday’s open rejected tests of both bias-down parameters, although only the 1678.00 bias-down signal was tested post-open. The 1672.50 bias-down target had held its test overnight. But there recovery was invalidated by exiting the bias environment too low.

Finally, Thursday afternoon’s 1681.75 bias-up signal triggered. But the bias environment was exited back under it.

Printing fresh highs during Thursday afternoon’s bias environment did leave unfinished business above at its 1687.00 bias-up target. Then a 6-1/2 point rally into the close fulfilled it to within 2-3 ticks. The market wants to rally. But one way or another, it keeps undermining its efforts.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Thursday’s close was still testing its 1684.25-1685.00 noon hour and afternoon bias environment highs. They weren’t rejected, so the session’s trending can extend without delay, and extending the rally without delay on a Friday could marginalize sellers. But not closing above those prior highs now requires the rally to extend higher without delay, or else buyers may be marginalized for the day, instead.[/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.