Trading Plan for 9/2

[pay]Pattern notes.
Monday night’s temporary bounce up to 1025’50 had stopped short of filling the gap back to Friday’s close. That was overnight, not intraday, but it was a better effort than Monday tried. It didn’t require being filled, anyway, but the unfinished business would have really nagged at any bearish scenario. Tuesday’s opening surge to 1027’75 did fill the gap, which did push price back down through prior lows.

The point I’m trying to make is that the market is trying to make a point. It’s not taking any prisoners. Any bounce’s purpose is just to refuel sellers, and it is not for accumulation or to gain traction. A bounce could start Wednesday morning – whether by gapping up, or from first probing lower lows down to 992’00-993’00 – targeting “higher prior lows” at 1015’00-1016’00.

Resuming the decline either immediately or after a bounce would next target 979’00-981’00. Whether gapping up first or gapping down, there might suddenly be unfinished business above the market where there currently isn’t any. This would help the next target hold as support temporarily, but it wouldn’t make the rally likely to resume.

Indicators and Internals.
Oversold technicals at Tuesday’s lows were neutralized by lower lows two-three more times before the close. No other oversold or overbought situation formed that might attract or inhibit price action either way Wednesday.

Wednesday’s opportunities.
Unless Wednesday’s open immediately resumes the decline forcefully, a corrective bounce would be very likely. It might already be underway by then. Anxiousness ahead of the afternoon’s FOMC Minutes should mid-day inhibit trending in either direction.[/pay]