Trading Plan for 8/29

Turnabout is fair play… So, recovering Friday’s opening plunge seems only right after rejecting Thursday’s opening surge. Actually, no. One of those episodes cleared the way for a bigger move in that direction — the other refueled it. [pay]

Pattern points… (Setups and technicals)
Friday morning’s fireworks were only Friday morning’s fireworks. The noon hour’s 1171.00-1179.00 range held tests through the afternoon. One brief dip attacked 1166.00, where RSIs diverged positively there to launch a recovery. Closing back at the range’s upper-end positioned the market for more fireworks Monday morning.

Either Friday’s late dip refueled buyers for another run at Thursday’s opening surge, or else it cleared away support to allow a retest of Friday’s lows.

Maintaining a probe above Friday’s ~1180.00 high would be attracted higher to test Thursday’s 1182.25 opening gap. Normally, overbought RSIs that formed during Thursday’s opening 15 minutes of volatility wouldn’t require a retest. But 1188.50 high should be retested anyway if touching 1182.25 doesn’t react down immediately. While any close above 1185.00 would target 1193.00, I would expect much of that distance to be covered well before the close.

Otherwise, at least a retracement of Friday morning’s rally would be underway. Almost any dip remotely targeting Friday afternoon’s ~1166.50 low would also probe under Thursday afternoon’s 1165.60 high. Below it is an air pocket with room down to 1151.00. Not much other support exists down to 1139.00, which is also a price attraction. Closing any lower would put into play a new downleg.

What’s Next… (Outlook and opportunities)
Saturday’s Strategy Session was interesting. Thank you to its attendees for their great questions and comments. The recording’s link is now available in the sidebar or here.[/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.