Trading Plan for 9/26

If retracing last week’s FOMC spike is bearish… then is it less bearish not to have extended down sharply by now? No, the timing doesn’t matter, only what is done with that time. And the time since retracing the FOMC spike has not been spent in accumulation.

Pattern points… (Setups and technicals)[pay]
This is becoming a little too familiar. Now into three days of retesting the origin of last Wednesday’s FOMC spike up. Retracing it isn’t unusual, no matter how substantial its interim trending. Not yet resolving the retracement is odd.

More than not resolving the retracement, but also probing fresh lows daily. And more than probing fresh lows, that is how buyers have been rewarded for absorbing the prior low. Two recent setups had potential to marginalize sellers to one degree or another. Repeatedly resolving in fresh lows is lousy advertising to attract more sponsorship for another recovery attempt.

At some point, the remaining buyers are going to capitulate. Finishing Wednesday at the range’s lower-end — despite there being no unfinished business below — suggests that capitulation had gotten much closer, and time available for a rescue is growing very short.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Wednesday’s closing action trended down, so gapping up Thursday above Wednesday afternoon’s 1693.25 high would trigger a “session-long rally” setup. Any shallower initial buying pressure would not be credible for gaining traction. And being vulnerable to breaking sharply lower, any shallower initial buying pressure isn’t likely, anyway.[/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.