Trading Plan for 8/30

If the market were certain of only limited Syrian action… then would it already be rallying out of the current range? Or, would it be waiting for a negative knee-jerk reaction to the first offensive, buying up the sell-off? I wonder if it’s either, if a favorable knee-jerk reaction to a limited attack would fatten up prices just enough to attract sellers.

Pattern points… (Setups and technicals)[pay]
Thursday was a day of second consecutives — all but the one that would have made a difference. A second consecutive morning recovery from a second consecutive pre-open dip, a second consecutive noon hour high and its second consecutive mid-afternoon slide.

A second consecutive steep downtrend into the close, with buyers failing to gain traction for a second consecutive day. A second consecutive higher close would have changed that, and would have been likely to rally into the weekend. At least sellers didn’t gain traction for a second consecutive day. But they almost did.

There isn’t much room to bounce again Friday, not if the decline were going to resume without first rallying to a significant degree. However, there is much room for selling pressure to be expended, and to still recover into the 3-day holiday weekend as its impending illiquidity squeezes shorts. Wednesday’s 3-day weekend indicator suggests that any fresh lows won’t be recovered

[/pay]What’s Next… (Outlook and opportunities)[pay]
This being a Friday, the morning’s bias is likely to persist through the noon hour. And this being a holiday weekend, don’t forget that there is no Saturday Strategy Session. Be sure to ask me in the Chartroom during market hours for any chart analyses that you need.

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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.