Trading Plan for 8/16

Wednesday’s Expiration Indicator triggered… and it confirms expectations for testing unfinished business. Things could get really interesting if it were fulfilled before Friday afternoon.

Pattern points… (Setups and technicals)[pay]
Wednesday’s last pre-open dip to 1397.50 reacted up through the open to 1404.50. That was Tuesday afternoon’s highs. It was pretty much Wednesday’s high, too. A brief probe up to 1405.75 just before the final hour was retraced back down to Tuesday morning’s 1402.50 low. That was Wednesday afternoon’s low, too.

So, despite preventing the morning’s recovery from extending higher, sellers did not gain traction for their efforts.And the morning’s 1407.00 bias objective became “unfinished business above” that requires being tested.

Meanwhile, Wednesday’s Expiration Indicator is passively bullish for closing back above the prior structure’s 1402.50 lows. An “actively” bullish signal required closing back above the 1404.50 prior high. Thursday’s open could still trigger an actively bullish signal by proxy above 1407.00.

By the same token, an actively bearish signal could trigger by proxy back under Wednesday morning’s 1400.50 reaction low. Not triggering it through the open would confirm the bullish indicator, whether active or passive.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Wednesday’s Expiration Indicator influences Friday afternoon and Monday morning price action. An interim dip is not required, but would be likely to recover. A retest of Tuesday’s 1409.50 “new Globex trend extreme” is likely, probably at least up to 1412.00. Back under 1399.50 through any relevant timing window would be a problem for any bullish resolution. [/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.