Trading Plan for 8/23

Wednesday’s sellers didn’t do… anything they weren’t supposed to. Wednesday’s buyers didn’t do everything they could have. Intraday selling was possible, but not likely to gain traction, and it did not. Intraday buying had potential to retrace Tuesday’s drop, but didn’t. Thursday’s session will be greeted with the same posture.

Pattern points… (Setups and technicals)[pay]
Sellers had expended a lot of energy during Tuesday’s drop to 1408.00 that was never refueled. Patient buyers had limited there efforts to only bounce into the close. That did not prevent probing fresh lows, but it suggested that any such probe would not extend.

Wednesday’s probes of fresh lows did not extend. The open’s dip to 1406.00 bounced up to 1411.25. The afternoon’s dip to 1404.25 recovered up to 1414.25. Its reaction down tested and held 1411.25 as support through Wednesday’s last 45 minutes.

On a smaller scale, Tuesday and Wednesday’s dips resemble the prior consolidation that formed while testing 1393.50-1394.25 support. So long as 1407.00 isn’t broken through a relevant timing window, Tuesday and Wednesday’s dips should also launch a rally effort.

[/pay]What’s Next… (Outlook and opportunities)[pay]
The session closed unchanged. That never qualifies for an overnight position. But extending any higher overnight would likely be attracted higher by the gap back to Tuesday’s 1419.00 open. Dipping under 1410.75 and 1408.75 would become vulnerable to attacking 1403.00 again. [/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.