Trading Plan for 8/18
If not another Ukraine-Russia headline… then would expriation have extended sharply higher? Or, if not for expiration, would the Ukraine-Russia headline have had less impact? Would the bullish WedEX have inverted Friday afternoon if implemented at resistance? We can explore those hypotheticals for days. But while extraneous news does change paths, it rarely changes destinations.
Pattern points… (Setups and technicals)[pay]
Spoiler alert: Friday’s close was testing 1951.00 for a second consecutive session. And the first session to test 1954.75 failed to close above it. No higher target is in-play. Having said that, sellers didn’t regain control either. And not for lack of trying. The noon hour’s 1937.25 low was 14 points under Thursday’s cash session close. Friday’s cash session close retraced that much of Friday’s decline.
Closing only a little negative still would have been something of a victory for the rally after being ambushed by the Ukraine-Russia headline. Especially after the first hour’s checkpoints had signaled inertia. And after the sudden, steep, substantial drop, which was in-line with expectations for the corrective rally’s demise. But the decline’s resumption should be triggered by running out of buyers, and not in reaction to news that can be discounted and absorbed. News only dilutes the crowd with weak-handed knee-jerk sellers, which attracts buyers.
Meanwhile, the bullish WedEX influenced Friday afternoon bullishly. It was threatening to invert if the post-open fresh highs weren’t maintained into the noon hour. And the open’s checkpoints suggested that was coming. Influencing Friday afternoon makes WedEX even likelier to influence Monday morning, too.
[/pay]What’s Next… (Outlook and opportunities)[pay]
Retesting Friday’s 1959.00 opening gap at Monday’s open could seal a top if rejected in time to avoid triggering bias-up. Gapping down too little would be be likely to retest Friday’s opening gap, too. Starting too high or too low would attract bigger sellers, or already reflect them… We’ll review that and other opening setups in the Saturday Strategy Session, beginning at 9:30 ET. See you there…[/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.