Trading Plan for 8/23

Wednesday’s Expiration Indicator kept a downward bias… on Friday afternoon and Monday morning price action. It’s interesting that gapping up umpteen points impede the indicator’s influence. [pay]

Pattern points… (Setups and technicals)
But its influence ended there. A new rally leg could have begun, even if only to retest the overnight rally’s high. Instead, a late dip retested the morning’s 1119.00 low. So, an afternoon rally would have been justified, but didn’t happen.

Meanwhile, both the morning and afternoon triggered bias-up. And both bias-up targets were met. Yet price action reacted only down from each target, back under their bias-up signals. Buyers gained no traction for their efforts.

Finally, Monday afternoon’s retest of the morning’s low was itself a knee-jerk reaction to late-breaking GS news. If not for its blip-down, the session’s last 60-90 minutes would have traded entirely within the noon hour’s range.

What’s Next… (Outlook and opportunities)
Monday’s afternoon’s 1119.00-1133.50 range will likely contain Tuesday morning’s range if pre-open action isn’t trending already. That may seem wide, but both sides of the range need not be touched. Recovering 1125.00-1127.75 could extend higher through the morning to threaten Friday’s 1153.25 high in the afternoon. Otherwise, a break under 1118.50 would target a retest of Sunday night’s 1111.25 low, and then lower… Click here for Monday’s post-close Market Wrap recording.
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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.