Trading Plan for 9/14

Remember how Monday’s surge borrowed… buying pressure from Tuesday’s session? Tuesday’s session suffered the consequence by not extending beyond Monday’s post-close high. Even a deep overnight dip could only recover, but not refuel. But Tuesday did not reverse down, making a big resolution likely. [pay]

Pattern points… (Setups and technicals)
Monday’s late surge had poked into Friday’s range. The surge was largely retraced before Tuesday’s open, which then recovered to probe Monday’s 1165.75 post-close high.

And that was basically it. The balance of the session essentially ranged around 1165.75, between Friday afternoon’s 1155.00 high and Friday morning’s 1169.00 high. So, Monday’s late surge wasn’t rejected, but it wasn’t much more productive.

And buyers did not gain traction for their efforts. The afternoon’s probe above Friday morning’s 1169.00 high was retraced to close under the morning’s 1168.00 high. Extending the rally any further Wednesday would all but require the open to gap up.

That doesn’t mean sellers exploited the opportunity. They could have gained traction by closing back under 1163.00-1164.00 — but a dip under it to 1158.50 was recovered to close at 1167.00. That dip did test afternoon lows through the 3:10-3:20 window. So, a lower open could melt down quickly, especially if the lower open followed fresh highs overnight.

What’s Next… (Outlook and opportunities)
It’s Wednesday of expiration week, so we’ll be talking a lot about Wednesday’s Expiration Indicator. When it does trigger a setup at the close, it can be very predictive of price action into and out of the weekend… Click here for Tuesday’s post-close Market Wrap recording.[/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.