Trading Plan for 8/9

It’s difficult being bearish… when sellers keep failing to exploit opportunities to regain control, expending energy without gaining traction. They can retake control, and might do it Thursday, but they haven’t yet, and didn’t do it Wednesday.

Pattern points… (Setups and technicals)[pay]
Sellers have failed at attempts both large and small. The larger failures include not trending down Wednesday. This was in spite of an overnight drop having extended Tuesday afternoon’s slide. The open’s gap down was positioned to form an Island reversal pattern out of Tuesday’s session. Recovering instead reflects weak sellers.

Wednesday’s sellers were confined to the afternoon’s no-bias environment, and even a last-minute dip originated too late to be sponsored by strong hands. It’s difficult taking these sellers seriously.

Fresh highs could be avoided Thursday in the same way they could have on Wednesday, by breaking low enough through the open. Back under 1393.25-1394.25 would be a good start to rejecting Wednesday’s recovery. Otherwise, any shallower opening dip or any opening strength is likely to test 1406.00-1407.00 before sellers can retake control.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Thursday’s econ calendar is essentially Jobless Claims. And it is its only real chance this week to impact the charts. Any strength it might produce won’t have another econ report Friday to reinforce its sponsorship. Meanwhile, the weekend’s illiquidity will start coming into view by noon Thursday.[/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.