Trading Plan for 8/1

Tuesday’s last-minute 4-point plunge… fulfilled unfinished business below. The plunge began within 3 minutes of the cash session close. So, Tuesday’s close should be retested eventually, even if Wednesday’s open were to gap up or down sharply.

Pattern points… (Setups and technicals)[pay]
And Wednesday’s open is likely to gap up or down sharply. The afternoon’s 1373.00 bias-down target had become “unfinished business below” requiring a test. That requirement was fulfilled at the close. There was no time to react up from 1373.00 or to extend down below it. Wednesday’s open is likely to compensate by gapping sharply.

Gapping up above the 1378.50-1380.50 prior high is as likely as gapping down under 1366.00-1367.00. There is a small chance of ranging sideways, regardless of the low’s extreme RSIs. In either case, the gap back to Tuesday’s 1373.50 cash session close will probably want to be filled.Tuesday’s close is essentially “equilibrium” for closing at a target or other relevant level. The next two trending attempts should alternate direction and retrace entirely, before a third gains traction. At least one of the first two trending attempts should be very productive — sizable, but failing to exceed a prior high or low through a relevant timing window.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Plenty of other econ reports are due Wednesday’s morning. Posturing ahead of the afternoon’s FOMC policy statement into the noon hour will help to reveal the ultimate reaction’s direction. So would previous trending attempts, including overnight. [/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.