Trading Plan for 8/13
If Tuesday’s close were just a little higher… then the rally — corrective or otherwise — would be back on-track. Tuesday’s close couldn’t have been much lower without signaling that the corrective rally had ended. Goldilocks might call that close “just right.” I think it was just wrong, and that the overnight action will make up for lost time.
Pattern points… (Setups and technicals)[pay]
Tuesday’s session was pessimistic. The open gapped down, the prior range’s lows were probed, and the close was negative. Not bouncing briefly at the open would have been more pessimistic. Closing under the morning’s low would have been more pessimistic, too, instead of recovering the afternoon’s lower low.
The interim high between the morning and afternoon lows was attacked into the close. But not touched. That’s pessimism. And it’s all “ineffectual pessimism.”
Ineffectual pessimism wasn’t very appropriate at this stage. Closing between 1931.75-1926.75 wasn’t appropriate. Wednesday’s open should compensate for the delay by gapping, up or down, sharply.
Too little was pointing either way to consider a hold-long or hold-short. But what there was did point up more so than down. There was the ineffectual pessimism that restrained the afternoon’s fresh low, or that inhibited the afternoon’s attack on the noon hour’s high. There was the overbought RSIs at the noon hour’s high that required a retest, the accumulative pattern at the afternoon’s low, and the immediate surge back above 1931.75 following Tuesday’s close.
Don’t forget the morning’s late no-bias holding the bias-down signal that didn’t offset it with a test of the 1937.50 bias-up signal. Trending down instead did fulfill the bias-down target’s selling pressure.
[/pay]What’s Next… (Outlook and opportunities)[pay]
Somehow rejecting all of that overnight, to gap down Wednesday, would confirm Tuesday was NOT ineffectual pessimism. Gapping down under the afternoon’s low might behave as a “session-long decline,” and new lows would be in-play. Otherwise, gapping up Wednesday to immediately reject Tuesday’s ineffectual pessimism would resume the rally to 1951.00.[/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.