Trading Plan for 8/1

Saturday’s Strategy Session begins at 9:30am ET… you can log-in up to one hour prior. We’ll cover any stock requests, and other market analysis. I’ll see you there! [pay]

Pattern points… (Setups and technicals)
Like Thursday, Friday’s close was another new low close, maintaining the decline’s traction. Also like Thursday, Friday’s intraday bounce neutralized any unfinished business above – in this case, it was the gap back to Thursday’s close.

In the process, the s 1301.25 corrective bounce target was met within 2 ticks. The portion spent back above prior lows was brief. And the portion spent in positive territory didn’t last into a relative timing window, so a recovery never gained traction.

1277.00-1278.00 had been attacked at the morning’s lows, but not touched. It does not require being retested, except for the “sentiment extreme” that was left under 1280.00. Having probed positive territory in the interim, there is no bullish reason to retest the sentiment extreme.

A recording of Friday’s post-close Market Wrap is here.

What’s Next… (Outlook and opportunities)
Obviously, much relies upon weekend movement in the debt situation. The House will try to hold its rescheduled vote Friday evening. I think the real nail biter will be when the Senate sends its mark-ups back to the House. If the House’s enough-is-enough crowd didn’t like their own chamber’s first two versions, then they won’t know where to begin with reconciliation. So, House passage over the weekend should be good for a temporary relief rally. [/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.