Trading Plan for 8/31

What the #%&@ was that?!… Tuesday’s late 1212.75 buy signal was not triggering convincingly. It finally did catch, as the session’s last half-hour began. This is not a reliable window for a valid breakout, which didn’t prevent a productive 6-point surge, but it prevented the surge from  gaining traction. So it was retraced, back to its 1212.75 origin, and then to 1203.75.[pay]

Pattern points… (Setups and technicals)
My next higher objective above 1193.00 is 1226.00-1228.00. It may be refined down slightly to 1225.00. I wonder whether it should be refined to something under 1218.75?

The reason I ask is because Tuesday’s late surge was retraced so substantially after touching 1218.75. Its cash session close equated to 1210.50, which does not give rise to my question. This is still above Monday’s prior high, a second consecutive higher close that confirm that the momentum of Monday’s close above 1193.00 remains intact.

But futures dipped much further down to 1203.75. This is back under Monday’s high, and also back under Aug 17’s prior high, after probing above each. Globex is slightly weaker, and not rejecting the extra selling.

A hold-short through the close could not be considered Tuesday since RSIs had become oversold. At 1210.50. That didn’t prevent sliding another 7 points. Unless rejected Wednesday by opening above at least 1208.00-1209.00, without taking RSIs overbought, a test of 1193.00 would be likely next.

What’s Next… (Outlook and opportunities)
For now, I am giving the rally a benefit of the doubt. Tuesday’s cash session close above Monday’s high is the determining factor. But not rejecting any or enough of Tuesday’s drop at Wednesday’s open would at least expect a deeper dip — whether its purpose were to refuel buyers, or to end the corrective bounce… Market Wrap was recorded, and you can view it 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.