Trading Plan for 9/24
If Tuesday’s last-minute slide were strong-handed… then why did it need to wait until the close? It extended lower after the close, too. But that’s not what makes it durable. Maintaining it through Wednesday’s open does.
Pattern points… (Setups and technicals)[pay]
We already knew before Tuesday’s session that positive territory was no-man’s land. At least, for the morning. Monday afternoon’s buyers had failed to absorb the decline’s momentum. So, the post-open test of 1987.50 held.
But that was after holding a test of the 1983.50 bias-down signal. And that put into play a test of the 1990.50 bias-up signal (which became unfinished business above). And that was in positive territory, which was no-man’s land. At least, for the morning.
Apparently, positive territory was off limits for the afternoon, too. The 1977.50 overnight low was retested down to 1975.50 during the afternoon’s no-bias environment. The last hour bounced back up to 1981.00, teasing that the afternoon’s drop could prove to be a very healthy detour.
Good luck with that. That last hour’s bounce failed. Miserably. The 1975.50 low was touched into the cash session close. The next lower support at 1971.50 was touched into the futures close. And 1968.25 was tested coming out of it.
Once again, rallying into positive territory would require gapping up. Gapping up above the bias environment’s 1982.00 high would trigger a “session-long rally” setup. That was only 6 points higher when the cash session closed — doable, but difficult. That’s twice as difficult from 1968.25. But still doable.
[/pay]What’s Next… (Outlook and opportunities)[pay]
Tuesday’s last-minute decline was the product of weak hands, since it originated so late in the day. Extending it down so substantially could be done only when opposition was not around to defend against it. None of which is a buy signal, but a warning to be careful if short or shorting overnight — not resuming the decline Wednesday would likely default to a massive rally.[/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.