Trading Plan for 9/23

If Monday’s drop had dropped any further… then it would be Wednesday’s drop, too. A hold-short would have triggered, likely to extend the decline overnight. It may yet extend overnight. But a leg’s origin can be the most telling clue of its destination.

Pattern points… (Setups and technicals)[pay]
The word “free fall” isn’t appropriate for this pattern. It isn’t even “a” word. But the decline from Thursday’s overnight high has yet to show signs of a bottom.

The decline’s sponsorship has lapsed — WedEX is a signal unto itself, and its influence lapses after Monday morning. Period. Price action since then only ranged flat-to-lower. WedEX sponsorship is gone, and until new sponsorship has replaces it… sort of a free fall.

Support sort of held at “lower prior highs” around 1984.00. It was tested at noon, and at the bias environment’s exit into 2:30, and after the final hour’s entry. The close was above it. But only above it. Reacting back up to close above a prior high would have been bullish for trapping shorts. Not reacting up means that the lows were chipping away at support.

Meanwhile, the only momentum is down. The bias environment’s exit was under the noon hour’s low but wasn’t confirmed at the final hour’s entry. Neither was it rejected. Unless Tuesday’s open were to gap up, fresh lows would be likely.

The next lower attraction at 1977.00 is also the maximum retracement of last week’s rally. Any lower would not be considered a retracement, Any lower would become too far removed from the orbit of Thursday’s overnight high. Despite “unfinished business above,” the next leg would be down.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Runaway trending is difficult amid low volume. And volume will thin out Wednesday afternoon ahead of the Jewish New Year worship. That makes Tuesday the last of the best opportunities for a decline to do damage — and maybe the last opportunity altogether to trap shorts.[/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.