Trading Plan for 8/29

Intraday rallies have been behaving… in an interesting way. It’s not necessarily bearish, not without triggering pent-up selling pressure — and then the behavior would become very bearish. Meanwhile, there may be one more chance to rally before the weekend.

Pattern points… (Setups and technicals)[pay]
Does recent market action look familiar? No? Try turning your monitor upside down. How about now, you see it, right? The last consolidation prior to probing fresh highs last week had repeatedly held dips testing 1393.50-1394.25 support. More recently, intraday rallies have held repeated tests of 1411.00 resistance.

The latest was Tuesday afternoon. The final hour had been exited at 1410.00, under the bias environment’s 1411.00 high, which was under the noon hour’s 1411.25 high. Not a buy signal among them. Trending up to fresh highs through 3:10-3:20 would have sufficed, but its probe was rejected.

1408.00 was still being tested at Tuesday’s close to avoid triggering a new downleg. That could have marginalized buyers through the weekend. But holding 1408.00 support only avoided triggering a new downleg. Recovering 1411.00 through Wednesday’s open may be the only path remaining to give 1419.00 another chance at being tested.

[/pay]What’s Next… (Outlook and opportunities)[pay]
The 3-Day Weekend signal that will trigger at Wednesday’s close. In general, another failed probe above 1411.00 could be very bearish into the weekend. Holding 1408.00 might have been bullish, if not still being tested at Tuesday’s close. Regardless, a valid rally should be obvious sooner rather than later.[/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.