Trading Plan for 9/12

In the final analysis… Tuesday afternoon’s dip held relevant support, preventing sellers from gaining traction for their effort. Converting that into an immediate resumption of the rally to a new high would be credible. Not immediately resuming the rally would start to suggest a new downleg was likely, first.

Pattern points… (Setups and technicals)[pay]
Tuesday’s bias environment ranged narrowly. Its 2:30 exit was still within the noon hour’s range. A 2-1/2 point break did enter the final hour under just under the bias environment’s range. But the noon hour’s low was still being tested, and the 3:10-3:20 window did not trend down, so bearish sponsorship did not increase.

Bearish sponsorship did not increase, and yet price extended down. It extended down into and out of the close, probing under 1431.00 by at least 1 point. So, the recovery attempt is hanging on by the skin of its teeth.

Overbought RSIs at Tuesday’s 1437.50 high require being retested, presumably up to 1440.25 or 1442.50 — sooner, rather than later, assuming that 1431.00 were to hold its test as support. Meanwhile, Thursday’s confirmed breakout requires a third higher close. The only new attraction below  is the gap back to Monday’s 1428.50 close.

[/pay]What’s Next… (Outlook and opportunities)[pay]
1431.00‘s recovery through Tuesday’s open had signaled Monday’s sellers were absorbed. Failing to hold it through Tuesday’s close would have meant sellers were retaking control. Failing to hold it through Wednesday’s open would target at least 1426.00 and possible 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.