Trading Plan for 9/13

If you don’t like this market… then stick around a few minutes, and a different market will appear. Sunday night’s gap down to new relative lows, then sharply lower lows overnight, produced a steep rally into the open. That didn’t prevent another sizable sell-off, or its recovery to fresh highs. Hopeful bulls might find only one thing lacking — spending any relevant time in positive territory. [pay]

Pattern points… (Setups and technicals)
Monday’s sessions — both overnight and intraday — neutralized a lot of selling pressure. From Friday’s late sell signal under 1149.00 targeting fresh lows under 1141.00, to a retest of last Tuesday’s 1133.50 low down to 1126.25 (down to 1123.50). And that was all before the open. Intraday lows fell only to 1129.75.

Monday’s session formed a potentially bullish Key Reversal. Gapping open to a new extreme in a multi-session trend, then closing in positive territory. It might even be considered a Pivot Reversal for the morning’s probe into positive territory — albeit brief, and only above the 1147.50 cash session close.

Monday’s bias-down signals left no unfinished business below. The morning’s 1144.50 bias-down signal triggered and its 1138.00 target was met. The afternoon’s 1138.00 signal was triggered and its 1131.00 target was met. Neither bias environment’s exit recovered its bias-down signal.

Each of the three bullish factors is mitigated in some relevant way. Downside objectives were not neutralized intraday, the Key Reversal formed due to dubiously late buying, and bias-down signals weren’t recovered in a timely fashion.

None of which prevents Monday’s late surge from extending higher — just not for very long if it were to extend higher overnight. The surge started too late to be the product of Monday’s accumulation, so it borrowed from future buying pressure. And borrowed heavily.

What’s Next… (Outlook and opportunities)
An opening dip to 1142.50-1144.50 could recover and extend up to 1180.00 or 1187.00. Any lower would risk a new downleg gaining traction. But initial strength would be too shallow and easily absorbed if not immediately recovering 1166.00-1167.00 through the open… Monday’s post-close Market Wrap is available here.[/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.