Trading Plan for 9/18

If expectations were for FOMC to taper… then would the market rally into the news? Expectations until Sunday morning were for Larry Summers to replace Bernanke. The market gapped considerably from Friday’s close on the Summers news. How big of a gap would be triggered by a taper surprise?

Pattern points… (Setups and technicals)[pay]
To taper, or not to taper… that is the question which will be answered Wednesday. Things might heat up a little. That would be a nice change from Tuesday’s two consecutive 1-1/2 point ranges, which were separated by a single 2-1/2 point surge.

Optimism remains alive ahead of the FOMC news. Not quite ineffectual optimism, in that the hovering is actually extending higher. But certainly not pessimism, either. In fact, a last-minute surge probed fresh session highs.

That last-minute surge came to within 3 ticks of fulfilling Tuesday morning’s “unfinished business above” at its 1700.00 bias-up target. Monday’s 1699.50 opening print was met to within a single tick. Officially, only a retest of Sunday night’s 1703.75  “new Globex trend extreme” remains outstanding.

But no unfinished business above can prevent an interim downleg, or prevent a downleg from extending without recovery.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Perhaps anxiousness ahead of the FOMC meeting is responsible for Tuesday’s narrow ranging. Perhaps it is the lack of news. Look for both to change Wednesday afternoon.[/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.