Trading Plan for 9/10

Saturday Strategy Session was missed… the past two weeks. It returns this weekend, starting at its usual 9:30am ET. We’ll discuss the market’s bigger picture, and then take any stock analysis requests. Its link is in the blog’s sidebar.

Pattern points… (Setups and technicals)[pay]
Despite Friday’s session ranging narrowly, it was not a non-event. Gapping up above prior highs is not noise. As for not extending higher through any relevant timing window, those periods are noise. But any targets they create are binding, and no less required to be met than any other.

It is natural to view the sudden lack of volatility — especially at new highs — as undermining the rally’s credibility. But the prevailing trend always gets a benefit of the doubt. So, Friday’s “hurry up and stop” behavior actually undermines sellers, since the burden of proof is on them.

So, Friday’s higher close confirmed Thursday’s breakout. Now, at least one more higher close is required, but not necessarily Monday. An immediate pullback would leave that unfinished business outstanding above.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Friday’s late surge neutralized the overnight high’s “new Globex trend extreme” that required a retest. It also fulfilled the morning’s 1438.00 bias-up target that had become unfinished business above. Not extending higher at Monday’s open would suggest a deeper correction first, whether to only 1423.00 or down to 1412.50.[/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.