Trading Plan for 9/12

Thursday’s Pivot Reversal predicted Friday’s weakness… The severity of Friday’s drop was compounded by having met and held the week’s highest calculable target at Thursday’s 1198.00 high. Will the powers-that-be keep their hands off long enough for the decline to play itself out?

Pattern points… (Setups and technicals)
Friday’s drop essentially ended at noon. It was entered at 1149.00, and the balance of the session ranged up to 1155.00 and down to 1141.00. A rally into the close ended the day ranging even more narrowly around 1149.00.

Meanwhile, RSIs never deteriorated. Repeated dips throughout the afternoon all stopped short of touching oversold territory.

Obviously, the weak open attracted selling forward that would have waited until the afternoon. And it attracted more selling that might not have been executed. Seems like a golden opportunity for a short-squeeze. But there wasn’t one – just firming up to 1147.25 at the cash session close, and then 1153.00 at the futures close.

Unfulfilled opportunities can speak volumes. Friday’s low printed during the last hour, which tends not to launch durable rallies. Friday’s cash session closed under 1149.00 to also undermine any rally effort.

Some weekend intervention could gap up Sunday and Monday’s opens to 1172.00 or 1185.00. Otherwise, the decline remains in-play. Its next lower objective is to retest Tuesday’s 1133.50 low, then 1126.25 and 1122.00.

What’s Next… (Outlook and opportunities)
Don’t forget to attend Saturday’s Strategy Session at 9:30am ET. Its link is in the blog’s sidebar… Friday’s post-close Market Wrap recording is here.

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.