Trading Plan for 8/13

[pay]About that close (How the prior session ended)
Thursday afternoon’s bias environment was exited at 1080.00. Thursday’s cash session closed at 1080.00. No net move during the timing window is made all the more relevant when considering its 7-1/2 point range in the interim. A range that included a failed attempt at trending up. A failed trending attempt that was contained entirely by the 3:10-3:20 timing window.

Pattern points (And technical influences)
Wednesday’s close under Friday’s prior low had signaled the trend reversed down. Thursday’s session could have rallied throughout, and sharply, and still not invalidated the trend change – not so long as its close was under Friday’s prior low.

Thursday’s session can be characterized as having rallied throughout, but all in negative territory. The trend change is not invalidated.

Since bears have secured their position, a rally effort Friday can’t be discounted. But its purpose would be only to refuel sellers. It’s similar to a bearish 3:10-3:20 timing window, which was also bearish Thursday.

That having been said, spending the entire session rallying in negative territory is not bullish. Rallying throughout Thursday morning’s bias-down environment wasn’t bullish either. And now two days of illiquidity is approaching. If there is a path lower into the weekend, it should be another rush to the exits.

Bottom line (My underlying premise)
A probe above Thursday’s highs could play out overnight, reversing back into negative territory at Friday’s open. This would be the clearest sell signal. Gapping down on a Friday is always difficult to extend. But early strength that isn’t retraced could marginalize sellers into late-afternoon.[/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.