Trading Plan for 9/10
[pay]About that close (How the prior session ended)
Thursday’s close dipped 3 points to end the cash session back at the afternoon’s 1099.00 bias-down signal. It wasn’t recovered coming out of the afternoon’s bias timing window, or coming out of the cash session (in fact, the futures close extended down to 1097.00). And Friday and Wednesday’s prior highs weren’t recovered through the close. Buyers gained no traction.
Pattern points (And technical influences)
Low volume Thursday undermined the pre-open rally. That much was obvious before the rally ever started. But volume also prevented the morning’s bias-up environment from retesting the pre-open’s overbought RSIs. That was a surprise.
And having failed one bias environment to retest the pre-open highs, the noon hour or afternoon windows became appropriate to rally. They did not. Bearish, or low volume? Perhaps that was answered when the afternoon’s bias-down signal went unfulfilled.
Overbought RSIs at Thursday’s 1107.00 pre-open high are likely to be retested. The 1106.00 gap back to Thursday’s open, too. It would be as likely to push back down – because similar to Wednesday, a massive intraday recovery attempt closed back under the prior session’s high.
Rallying strongly enough and early enough Friday would attract sellers to exit or short into the weekend, and the session could end in steep decline. Only firming at the open wouldn’t be as attractive to sellers, and would be less vulnerable to reversing down.
An overnight dip should at least fulfill Thursday afternoon’s 1093.50 bias-down target. It should at most fulfill the target. Any lower would come dangerously close to breaking support, and reversing momentum down into the weekend.
Bottom line (My underlying premise)
Thursday’s last-minute 3-point drop from 1102.00 fell 2 points more into the futures close. And then another 2 points after the Globex open. Rejecting another recovery attempt would find support well chipped away.[/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.