Trading Plan for 8/23

If not for NASDAQ’s outage… then would Thursday’s rally have gotten any higher any faster? Perhaps Wednesday’s high could have been probed earlier, leaving the final hour only to firm, or to range flat-to-higher. But while the integrity of intraday price action during the outage may have been suspect, the high and the close are probably where they would have been.

Pattern points… (Setups and technicals)[pay]
NASDAQ’s little glitch Thursday afternoon interrupted a “session-long rally” that was triggered by gapping up through 1646.50. The outage didn’t affect the setup’s main feature which is to print a new session high in all but one timing window, including the final hour. And it didn’t prevent fulfilling the morning’s 1654.75 renewed bias-up target, kept alive by holding the morning’s 1649.00 bias-up signal as support through the bias environment’s exit.

And it didn’t prevent fulfilling a retest of overbought RSIs at Wednesday’s high. In fact, Thursday’s 1657.75 high formed its own overbought RSIs that require a retest.

The issue also didn’t help sellers. The gap back down to Wednesday’s 1641.50 cash session close will need to be filled at some point, if not also its 1636.50 cash session close. And Wednesday night’s 1631.50 low was a “new Globex trend extreme” that requires retest intraday eventually.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Session-long rallies usually extend higher at some point the following day, so reversing down immediately Friday is unlikely. But reversing down eventually Friday may be the only way to retest Wednesday night’s lows anytime soon. Now that “lower prior highs” at 1648.00 and 1632.00, extending the bounce any higher than 1661.00-1663.00 would target 1669.00. And retesting 1669.00 would be likely also to probe “higher prior lows” 20 points higher. [/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.