Trading Plan for 9/20
[pay]About that close (How the prior session ended)
Quadruple witch expiration came in like a lion and went out like a lamb. For all of the volatility leading into Friday’s session, overnight and through its open, the balance of the session was rather tame. A generally narrowing range narrowed further, ending unchanged from Thursday’s cash session close.
Pattern points (And technical influences)
Apparently, Friday’s session was over before it started. That can happen, when the session begins before it starts. Thursday night’s 26-point round trip from its 1120.00 cash session close was retraced through the first half-hour. The balance of the session ranged around 1120.00, where the session closed.
The morning’s bias-up parameters were rejected to create a sell signal targeting 1111.00. The objective remains outstanding, regardless of any interim price action.
Friday’s range narrowed throughout, except for a brief rally attempt when the afternoon’s bias environment lapsed. Its failure did not react down to a fresh low. Nevertheless, that one exception was enough to disqualify the pattern from being an “extended narrowing range” or triangle. So, its first breakout attempt would be credible for extending into a durable leg.
Regardless, the ultimate resolution is still likely to be down, thanks to Friday’s failed rally attempt. Wednesday failure to trend had closed the door on any trending being able to succeed Friday. An ill-timed trending attempt reveals weak sponsorship. Probing the range’s lower-end and recovering could have launched a new rally leg. Probing the range’s upper-end and failing should instead launch a downleg.
Bottom line (My underlying premise)
Expiration’s character tends to repeat the following morning. Monday’s open may to attempt another rally, or simply range narrowly. An immediate drop would likely bounce to delay its follow-through until expiration’s influence had lapsed. However unlikely it may be to resume the rally, it can’t be fully discounted without first closing under 1116.50.[/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.