Trading Plan for 8/11

[pay]About that close (How the prior session ended)
Tuesday’s peak filled the gap back to Monday’s 1124.50 cash session close. It only filled gap, and only to the cash session close. A better test would have probed the gap by 2-3 ticks instead of just touching it.And Monday’s futures close was just 4 ticks higher. That’s not enough pessimism to prevent a downleg, but it did limit the drop to only 1116.25, and only through 3:20. The balance of the session ranged sideways.

Pattern points (And technical influences)
The 3:10-3:20 window trended down throughout, securing a bearish resolution. A subsequent bounce’s purpose would be to refuel sellers. A bounce wasn’t required, and it wasn’t substantial, but it was retraced back down to the 1118.00 area.

1118.00 is Monday morning’s low. Holding its recovery through the close allows another bounce, whether overnight or at Wednesday’s open. Its potential is 1125.50-1126.00, and any higher would signal a bigger move underway. The 3:10-3:20 signal suggests that won’t happen.

Under 1116.25 would trigger another attempt to resume the decline. Tuesday’s low barely touched the 1108.50 upper-end of Friday afternoon’s ranging, so a test of its 1105.50 lower-end is likely. And that’s unlikely unless a new downleg is underway.

Bottom line (My underlying premise)
The bigger picture says the ultimate resolution is down. There shouldn’t be much delay in proving this out, if this will be proved out. Perhaps another bounce is needed, but too much or too much longer probably can’t be tolerated if this week intends to resume the decline.[/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.