Trading Plan for 8/13

If sellers couldn’t extend… any the week’s multiple sell-offs, then the weekend’s impending illiquidity could only hurt their chances. That was the premise for a rally Friday. It became the premise for absorbing Friday morning’s two significant sell-off attempts. Then it again became the premise for a rally that developed into the close.

Pattern points… (Setups and technicals)[pay]
Friday morning’s no-bias environment had put into play a test of the 1402.00 bias-up signal. It became “unfinished business above” by exiting the bias environment above the 1395.50 bias-down signal. The afternoon’s narrow ranging needed only to avoid breaking under support for the attraction above to work its magic.

It helped that there was a premise for rallying Friday. Retesting 1393.50-1394.25 yet again did not necessarily help Friday’s rally. It probably only delayed it.

The morning’s sell-off(s) did chip away further at 1393.50-1394.25 support. This will become an issue eventually — perhaps sooner rather than later, since the week’s extended ranging has made the next breakout attempt likelier to fail from a lower level, e.g. 1406.00-1407.00. But some fresh high must first print before the next reversal to support can fail.

Meanwhile, 1406.00-1407.00 could be extended up to 1428.00. Not that this would be any more bullish, or much lengthier. And as usual, breaking under 1393.50-1394.25 through a relevant timing window could avoid printing fresh highs before reversing down.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Don’t forget, there is NO Saturday Strategy Session this weekend. Feel free to request stock analyses throughout the week as needed.[/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.