Trading Plan for 8/16

If that’s the work of weak hands… then what do you think strong hands can do? This is the natural follow-up question to my suggestion that Thursday’s 26-point plunge was sponsored by weak hands.

Pattern points… (Setups and technicals)[pay]
Starting from a standing stop, from Wednesday’s “inside day” close at 1682.25, typically requires new sponsorship. It doesn’t tend to arrive in this manner, by gapping down so substantially. Thursday’s open gapped down to 1669.00, under the 1670.50 prior low and then extended down to 1657.00.

Nevertheless, the directional signal gets every benefit of the doubt regardless of its origin.

The next lower objective is a test of 1648.00, WedEX triggers a delayed actively bearish signal, and a daily trend change is underway. All of which now requires a second consecutive lower close for confirmation, or at least no recovery through Friday.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Immediately recovering Friday above Thursday afternoon’s high, above the room for noise around it up to 1666.25, could produce the recovery that Thursday afternoon’s bounce tried, and failed. Lesser strength at Friday’s open could gain traction if 1648.00 were tested overnight. But this being a Friday, the morning’s bias can extend well into the afternoon. And this being expiration, initial trending can gain be predictive of the entire session.[/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.