Trading Plan for 8/14

If Wednesday morning’s rally had been delayed… then its afternoon version would have been much more capable. Allowing buying pressure to become a little more pent-up can have impressive effects.

Pattern points… (Setups and technicals)[pay]
Wednesday’s plan was on-track. Back-and-fill in the morning and then resume the overnight rally that afternoon. But, whatever its cause, the morning’s 7-point surge to 1945.00 stole the afternoon’s thunder.

It also stole some of the afternoon’s sponsorship. Big as it was, it was a fraction of the afternoon’s capabilities. At least the surge revealed elasticity, a market willing and able to rally. Allowing buying pressure to become a little more pent-up through one more timing window could have neutralized the rally’s 1951.00 target within an hour either way of Thursday’s open.

Evidence of that is being delivered after the close, which has gained 3 points to probe above Wednesday’s highs.

Correcting the surge throughout the afternoon by only 38.2% reveals optimism reaching excessive levels. Impatient buyers prevented a healthy 61.8% corrective dip. The shallower dip refueled buyers, but weak-handed buyers.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Perhaps the corrective rally’s 1951.00 target will be met at Thursday’s open anyway. There is room for noise above it to 1954.75. Testing either one early would be vulnerable to reversing down, and to ending the corrective rally from last Thursday night’s lows. Dipping first Thursday at this stage of the pattern, or simply hesitating, would be the stuff of bigger rallies.[/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.