Trading Plan for 9/22

If not for the bearish WedEX… then would Thursday night’s high have been retested Friday? Probably not. The indicator’s influence applies much more to Friday afternoon than to Friday morning. But that doesn’t affect its ultimate attraction.

Pattern points… (Setups and technicals)[pay]
Friday’s various influences seemed at different times to be in conflict with each other. But really, it was just the market trying to satisfy as many different interests as possible. Ultimately, it was the WedEX signal that ruled.

Not the 2014.50 “new Globex trend extreme.” The overnight high wasn’t rejected deeply enough at the open to be assured it wouldn’t be retested immediately. In fact, dipping to the 2007.50 bias-up signal was retraced to 2012.75. But its retest is still required intraday.

The overnight high had come within 3 ticks of the morning’s 2015.25 bias-up target. But that was too long before the cash session for its test to have fulfilled buying pressure. Triggering the bias-up signal at 10:15 was invalidated by sliding under 2007.50 through 10:30. The signal left no unfinished business above.

Which brings us to the WedEX, which had triggered “passively bearish.” It’s active Friday afternoon and Monday morning, and can’t take credit for Friday morning’s slide. Being passively bearish, its influence was likelier to absorb bounces than to break support. And it did.

In fact, the morning’s drop extended until the bias environment triggered at 1:20. The bearish WedEX didn’t prevent bouncing into the final hour. But the PASSIVELY bearish WedEX absorbed it. A last-minute plunge retraced precisely 61.8% of the 8-point bounce. Lower lows after the close retraced more.

Having been influential Friday afternoon, WedEX is even likelier to influence Monday morning. Having been modestly influential, it should now be terrifically influential. So, if Monday’s opening 15 minutes of volatility aren’t obviously bearish, then it would be possible that WedEX’s influence has already lapsed.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Be sure to join me at 9:30am ET for the Saturday Strategy Session. I’ll resend the link separately in the morning from the Marketfy site. We’ll review some tips for using the new site, review the market’s bigger picture, and then do instant chart analysis of any stocks or markets that subscribers request. See you there…[/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.