Trading Plan for 8/15

[pay]Pattern notes.
Thursday’s surge was unable to maintain its 6-point probe above yesterday’s ESu 1295’00 high. If the probe was a warning shot across the bow at sellers, then Friday’s open should waste no time extending sharply to higher highs and attack 1306’00-1307’00. By the same token, if the afternoon’s dip was a warning to buyers, then Friday’s open should drop quickly to 1284’00 and lower.

Sellers can be excused for not retaking control during the last hour’s narrow ranging. The timing wasn’t optimal. But buyers can’t be similarly excused. They had had control until the afternoon slide, and had been very productive. They should have produced another rally leg to new session highs, unless the afternoon slide isn’t only a correction, and intends to extend down sharply.

Big trending moves are very difficult to begin during option expiration sessions. The rally could still resume, but it would be suspicious.

Indicators and Internals.
1.75 times more advancing issues than decliners were produced by 2.25 times more up volume than down volume. Total volume continued to decline, so I wonder whether the market wants to fulfill its obligation to reward Thursday’s buyers for their relative producitivity.

Friday’s opening setup.
Several econ reports Friday will try to interfere with expiration. Most notable is Consumer Sentiment 30 minutes after the open at 10:00, timing that tends either to accelerate or else reverse any initial trending.[/pay]