Trading Plan for 9/13

Without Wednesday’s last-minute surge… the session would not have made much sense. Surging fulfilled several bullish setups outstanding from the past several sessions. In the process, a lot of intraday pessimism was rejected. And a lot of upside attraction was neutralized.

Pattern points… (Setups and technicals)[pay]
Wednesday morning’s dip to 1433.00 in a bias-up environment resolved as it should, which is to reverse back up. Except that it didn’t. The reversal up touched the morning’s high, but the 1440.25 bias-up target remained outstanding. It took a retest of the low for the market to launch a surge that touched 1440.25.

Even then, 1440.25 wasn’t touched until after the cash session’s 1437.00 high. Its target is neutralized, without closing above it, so no higher target is in-play. Meanwhile, Wednesday fulfilled the third higher close that was indicated by Friday confirming last Thursday’s breakout.

There is no requirement to probe a fresh high. Reversing down would leave no unfinished business above to inhibit developing into a durable downleg. That said, a credible downleg would begin after firming intraday to fresh highs — less likely by rejecting a gap up, or by gapping down dramatically. Trending up into the noon hour would make a downleg unlikely at all.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Satisfying all motivations and attractions above Wednesday comes in time for the week’s busiest economic calendar. A calendar that includes the FOMC policy decision, and the chairman’s press conference. Thursday’s outcome could be very predictive of the next several sessions.[/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.