Trading Plan for 7/7

[pay]About that close (How the prior session ended)
RSIs diverged positively into the two-hour consolidation’s low under 1014.00. The consolidation’s pent-up buying pressure wasn’t saved for Wednesday’s open. Instead, the setup was already fulfilled by bouncing to just under 1026.00. The bounce began too late and from too low for its close just above 1022.00-1023.00 to be bullish. So the buying pressure was expended for nothing.

Pattern points (And technical influences)
Tuesday’s session was another reminder that this is a bear market. Rallies can be brief, and can end abruptly. Sellers may not have gained traction from Tuesday’s ultimate dip, but the burden of proof was on buyers.

Not having gained traction, sellers must assert themselves at Wednesday’s open to resume the decline. Dropping under 1018.00 would likely be within the context of a slide back to the 1003.00-1007.00 lows.

Otherwise, a flat environment could attempt to rally again – if only to retest Tuesday’s overbought RSIs at its 1038.50 high. Recovering 1028.50 would signal and 1031.00 would confirm.

Bottom line (My underlying premise)
Probing Tuesday’s highs by more than a couple of points for more than a couple of minutes could develop into the bear market rally that Tuesday’s open tried to be. There’s no requirement to retest it, but much more delay in extending the decline would suggest sellers were hibernating. If they’re not, then their presence should be obvious by Wednesday afternoon.[/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.