Trading Plan for 8/16

[pay]About that close (How the prior session ended)
The door had slowly shut on potential for a late-afternoon downleg Friday. There’s always time for a very late-afternoon downleg. Unfortunately, it’s not very reliable. Friday’s price action weakened soon after its afternoon bias signal failed to clearly trigger a bias-up. Supports weren’t broken early enough to generate much momentum. But the session ended at its lows nonetheless.

Pattern points (And technical influences)
Friday afternoon’s action didn’t really trend. It was more about falling back to the intraday range’s lower-end. This is an important distinction for an inside day that ends at its extreme. Inside days that trend tend to be reversed. Friday’s inside day didn’t trend, so it only paused the decline.

Inside day’s aren’t predictive, other than for what they leave outstanding. The gap back to Thursday’s 1071.25 open remains unfilled. And now “ineffectual optimism” can be added to the mix. Despite falling 16 points overnight, Friday’s pre-open low stopped 5 ticks short of filling Thursday’s opening gap. That’s optimism. The 12-point reaction up was retraced to session lows. That’s ineffectual optimism.

Bottom line (My underlying premise)
Wednesday’s trend change now has two days behind it. There’s nothing accumulative about the pattern since then. Although a bounce Monday morning can’t be discounted, only a gap up above the 1087.00-1089.00 area might launch a corrective bounce. Otherwise, lower targets are in-play, if only slightly lower at 1068.00, or much lower at 1053.00 and 1035.00… Check back Sunday for information on the Hindenburg Omen recently noted. [/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.