Trading Plan for 8/2

All unfinished business below… has been resolved. And the decline missed an opportunity to extend. None of which is a buy signal. While it does make fertile ground for a buy signal to form, waiting too long will just resume the decline anyway.[pay]

Pattern points… (Setups and technicals)
Last week ended with a sentiment extreme at 1278.50 that required a retest. It had formed during an attack on 1277.00-1278.00, which had been put into play by Wednesday’s close under 1309.50. Then Monday morning’s rejection of both bias-up parameters put into play the two bias-down parameters at 1285.00 and 1278.25.

They were all neutralized during Monday’s first half-hour.

1276.00 was tested in the process. Closing under 1276.00 would put into play the decline’s next lower objective at 1251.00. Despite having nearly all day to extend under 1276.00 – or to bounce and then fall back under 1276.00 – Monday’s close held 1276.00 as support.

Actually, 1276.00 held as support because of a rally back above it when the afternoon’s bias environment lapsed. That’s one timing window. As with neutralizing unfinished business below, it does make fertile ground for a buy signal to form. But it is not a buy signal – at least, not yet.

What’s Next… (Outlook and opportunities)
1282.75 equates to Monday’s cash session close, and it was above Friday’s low. It’s not a buy signal, and it doesn’t negate the trend’s new low close. But recovering from another new low intraday to close positive would form a bottom. Otherwise, the trend remains down. [/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.