Trading Plan for 9/26

[pay]Pattern notes.
Thursday’s dominos all fell in-line with the bullish focus on moving back to last Friday’s highs. That is, all the way until the noon hour’s end, and the focus on recent highs was replaced by a fear of falling. A series of mid-afternoon dips each stopped short of touching ESz 1210’00 support, dooming the eventual bounce to failure: the failure of probing under 1210’00.

That, too, was met with an otherwise inexplicable buying surge. The 1210’00 area is significant in that it would serve either to limit a one-day corrective bounce, or else propel a retest of last week’s highs. It was exceeded by 15 points intraday, so to close within 1-2 points of 1210’00 is bearish for having flubbed the opportunity to break higher. The actual close was higher, but only thanks to a very last-minute reaction – not exactly a sign of strength.

Unless Friday’s open were to extend Thursday’s last-minute surge, I would expect sellers to take control of the morning’s price action. And the weekend’s illiquidity will start to appear absolutely frozen solid when everyone starts realizing the one-day corrective bounce was just that.

Indicators and Internals.
Technicals avoided oversold territory during the afternoon’s weakness, leaving plenty of room for further deterioration before any bounce might be forced.

Friday’s opening setup.
GDP is due before the open, but Consumer Sentiment might be more influential at 10:00. A gap down at or under 1210’00 would confirm that the last-minute surge was more ill-timed optimism. But this being a Friday, the initial trending will be likely to persist well past the noon hour, so I would not want to be short if Friday’s open were to maintain Thursday’s last-minute surge, let alone extend it higher.[/pay]