Trading Plan for 9/23

If the FOMC rally is going to be revisited… then must its reaction down end at the spike’s origin? Its retest is essentially underway, and dipping any deeper would start to threaten gaining traction for a downleg.

Pattern points… (Setups and technicals)[pay]
WedEX was passively bullish. Passive, because its bullishness was due only to a breakout that was two hours old when the signal triggered. By noon Friday, the signal inverted. The morning had trended down, and so did the afternoon.

All of which may have nothing to do with WedEX. But if the signal is responsible for Friday afternoon’s decline, then Monday morning’s price action should trend down, too. The open can be flat, or gap in either direction. Even if gapping up, the bearish WedEX would point the balance of the morning down.

Meanwhile, there are still “lower prior highs” just under Friday’s lows attracting price down. Wednesday’s breakout wasn’t confirmed Thursday. And there’s that nagging Gold tell — the yellow metal’s pre-FOMC slide hasn’t yet induced its customary stock market reaction. Should be an interesting start to the week.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Join us this weekend for the Saturday Strategy Session, linked from the blog’s sidebar. It begins at 9:30am ET, and we’ll discuss the bigger picture, along with any chart analysis of stock picks from other subscribers.[/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.