Trading Plan for 8/18

Wednesday morning’s probe of fresh highs… was rejected. But recent support held. Guess what that says about expiration’s bias… A recording of the post-close Market Wrap is linked here.[pay]

Pattern points… (Setups and technicals)
Wednesday’s initial 1198.00 buy signal quickly fulfilled the morning’s 1205.75 bias-up target, and peaked. The morning was exited back under 1198.00. New highs were both probed and rejected, all during the morning’s bias environment.

This follows Tuesday’s two bias-down signals, both having fulfilled their own bias-down targets. If that really cleared the decks of sellers, then Wednesday morning’s rally should not have been retraced. And it should not have been rejected into negative territory.

Nonetheless, sellers were marginalized by holding the test of 1184.00 support through the afternoon bias environment lapsing. Sellers were marginalized, and yet the balance of the session couldn’t gain traction on three separate probes above 1190.50. Sound familiar? That’s similar to the morning rally’s problem.

Oversold RSIs at Tuesday’s 1177.50 low still require a retest. The sentiment extreme at Wednesday’s 1181.50 low should be retested, too. Both retests are likely next so long as Thursday’s open isn’t rallying back above Wednesday’s highs.

What’s Next… (Outlook and opportunities)As for the balance of the week, Wednesday’s session of expiration week can predict bias through Monday morning. And Wednesday’s session probed two prior session highs without closing above either one. There is potential for a detour to probe fresh highs Thursday, triggered above 1199.00. But closing under 1184.00 should trend down into the weekend, and out of it. [/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.