Trading Plan for 8/13
[pay]Pattern notes.
Wednesday’s close was similar to Monday. The last trending attempt signaled was a reversal back into the session’s range. And despite so little time remaining, the signal’s target was fulfilled at the close. In both cases, the predictable had been fulfilled. With no new pattern having formed, the market was making no new predictions.
Monday’s trending was a bounce back up to session highs. Its target was 1005’00-1007’00, whose lower-end was met at the cash session close while its upper-end was met just minutes later. Wednesday’s trending was a drop from session highs targeting 1002’00, finally met just after the cash session close.
The session close is a timing window, just like the bias windows. They aren’t often entered without either a target outstanding or a pattern forming. It’s already happened twice this week.
Wednesday’s uptrending session rejected new afternoon highs on the way to closing under noon hour lows. Buyers retaking control Thursday would all but require an immediate recovery of the noon hour’s 1006’50-1007’50 highs to reject having closed under the noon hour’s lows. That’s just to retest Wednesday’s highs up to 1010’25, and be positioned for retesting last week’s highs, too.
Sellers have a lower standard, to break under 1001’00, and a much greater near-term reward at 994’00. This doesn’t make sellers any more likely to regain control Thursday. But the weekend’s arrival should make clear that the past two-week trading range has been topping, unless it wasn’t.
Indicators and Internals.
The morning’s persistently overbought 3-minute RSI helped to keep expectations pointed up. The afternoon’s simultaneous negative divergence made clear that accumulation wasn’t forming and that sellers would be pushing back. But there was no technical signal at the close to leave any unfinished business.
Thursday’s opportunities.
The reaction to Monday’s satisfied trending was a gap down Tuesday. Wednesday’s reaction on Thursday will have plenty of news catalysts – three reports at 8:30, Jobless Claims among them. Things might calm down for the morning (if the open is volatile) ahead of the 1:00 auction for 30-year Treasuries. [/pay]