Trading Plan for 8/20

If Monday’s lows were probed first… then the balance of the session could have been spent probing positive territory. That would have left a new low close outstanding. The alternative was to leave downward momentum outstanding. A bottom didn’t have much of a chance.

Pattern points… (Setups and technicals)[pay]
Monday’s new low close fulfills the minimum requirement of last week’s trend change signal. The trend may yet extend down, sharply and substantially, but not because of the trend change signal. More important is that a bounce would not be doomed in order to fulfill the signal.

A bounce is possible since the 1648.00 “lower prior high” is being tested. Also, ts 1643.000 bias-down target was tested and held without putting into play any lower targets. And there are no oversold RSIs or divergences at the low. So, bottoming here would leave no unfinished business below.

Meanwhile, the origin of last week’s break was itself suspicious, and its 1683.00 “higher prior low” could attract price higher. Not that it must be tested ever again, but its test would be likely if any accumulation pattern were to form.

[/pay]What’s Next… (Outlook and opportunities)[pay]
No accumulation pattern has yet formed. Gapping up could extend higher temporarily if 1656.00 were recovered. A hold-short barely avoided qualifying, but gapping down would target 1632.00-1636.00, with potential for extending to lower lows at 1618.00-1621.00.[/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.