Trading Plan for 8/3

[pay]About that close (How the prior session ended)
Credible late-afternoon trending needed to start when the no-bias environment lapsed, if it wasn’t already underway. It was already underway, recovering from testing the 1118.00 area thanks to impatient buyers. The last hour only ranged sideways, testing the pattern’s 1124.00 target .

Pattern points (And technical influences)
The close dipped back down to the morning’s 1121.75 high, so buyers didn’t gain traction for their effort. And it was quite an effort – gapping up and extending higher, printing session highs in the last hour. Except for Friday’s action not predicting it, Monday’s pattern was “session-long trending.”

Fresh highs in the last hour of a session spent exclusively in positive territory tend to be retested. So, an overnight dip that greets Tuesday’s open from negative territory might be a compelling long-entry. Although a firm open would already neutralize that bullish potential, it wouldn’t necessarily be a sell setup.

Regardless of intraday fluctuations, the bigger question is whether the rally’s 1108.50 and 1118.00 targets are being exceeded. Monday did finish higher, but not cleanly – the session’s midsection ranged around 1118.00 up to 1121.75, which was still being tested at the close. The lower-end of that range was 1117.50, and closing under it would signal 1118.00‘s test had held again.

Bottom line (My underlying premise)
Without a qualified breakout above 1118.00, there is no unfinished business above. Higher highs intraday would be entertaining, but would not assure closing higher. With the recent string of positive reactions to econ reports, and with plenty of data points coming Tuesday morning, we’ll see whether sellers have accepted the burden of proof.[/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.