Trading Plan for 7/8

[pay]About that close (How the prior session ended)
1-minute and 3-minute RSIs were simultaneously overbought at Wednesday’s close. An immediate pullback would be likely to recover, at least to retest the session’s 1059.75 high. And there is potential for an immediate pullback because RSIs were overbought at the high.

Pattern points (And technical influences)
The 1059.75 high printed after the cash session close, thoroughly probing the rally’s 1058.00-1059.00 objective. The cash session high was only 1057.50. The 1058.00-1059.00 area should be tested intraday.

From gapping up to the prior afternoon’s last relative high, to printing its own session high into the close, Wednesday’s session behaved like a session-long rally. Session-long rallies tend at least briefly to produce a fresh high the following day. Session-long rallies aren’t followed by another session-long rally.

An overnight dip would be likely to recover back to at least the 1058.00-1059.00 area. Preferably a dip would bottom around 1051.00. Any lower would start to gain traction for a decline.

There’s no particular limit to an intraday probe above the rally’s 1058.00-1059.00 objective. Closing above it would put into play targets at 1076.00, and potentially 1080.00. Extending higher Thursday morning without dipping first to refuel buyers might end the day back in negative territory.

Bottom line (My underlying premise)
Don’t forget we’re in a bear market, and this is a bear market rally. Its intent is to aggressively expend all available buying energy, attracting all available buyers. Being a bear market, that buying energy doesn’t last long. And rally ends abruptly, reversing steeply, and dropping deeply[/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.