Trading Plan for 9/22

[pay]Pattern notes.
Monday morning’s ranging broke higher into the afternoon’s ranging. The 1061 lower-end of Friday’s range was tested as resistance. The gaps back to Friday’s 1061 futures close and 1062.75 cash session closes were filled and held as resistance.

Good riddance to Monday, and also good riddance (presumably) to the entire expiration influence. Monday’s late-morning surge may have been all about refueling sellers for a retest of the 1051.50 pre-open lows. But Monday’s session was all about resuming Friday’s ranging without either buyers or sellers gaining traction.

One big question yet to be answered is whether the Labor Day rally leg expired with expiration. It could still be replaced by another rally leg, but at a much steeper slope. That option is probably off the table, especially if a steep rally isn’t underway at Tuesday’s open. So, the bigger question is whether the market’s next phase is to range sideways, or else try correcting down.

Unfinished business below Monday’s close may try making the case for sellers. A break under 1046 is still needed to signal momentum reversing down. A close above 1066 would suggest that the rally was resuming.

Indicators and Internals.
Monday’s 3-minute indicators weren’t very useful. But that’s not surprising for a session that was essentially two trading ranges interrupted by a brief surge. That surge wasn’t preceded by any technical setup, making it likelier to be retraced.

Tuesday’s opportunities.
The day’s econ calendar is sparse, so unfinished business should have an impact. Monday’s late-morning surge originated during a bias-down environment, inappropriate timing that requires its complete retracement back down to 1055.50. Extending lower would target a retest of Monday’s pre-open lows. The morning’s 1050.50 bias-down target was never touched, and the delay could extend its test down to 1047. An early recovery above 1061-1062 could run higher, instead.[/pay]