Trading Plan for 9/27

[pay]About that close (How the prior session ended)
The last several minutes of Friday’s session rallied sharply – 6 entire ticks. Not points, ticks. At least, it seemed like a rally, after the numbingly narrow ranging underway since late-morning’s peak.

Pattern points (And technical influences)
Failing to close above Tuesday’s high after probing it would have robbed Friday’s buyers of their traction, if there were any buyers to rob. But they were already expended by 11:00. The gas tank still had fumes, but only fumes.

Even the 3:10-3:20 window couldn’t be bothered to probe either end of the range, each only just 2 points away. Had this not been a Friday, then strong hands would have tipped their hand, but they had stopped participating much earlier.

Strong hands were very much a factor. They had produced Tuesday’s overbought 3-minute RSI at 1144.00, and Wednesday’s overbought RSIs at ~1140.00. Only weak hands remained to sponsor the interim dive to Thursday’s 1117.25 low. Strong hands returned to sponsor the recovery.

Extended narrowing ranges tend to break falsely in one direction before reversing more substantially in the opposite direction. That having been said, a spike up at Monday’s open could extend higher – albeit at a much more gradual pace – through Tuesday afternoon.

Reversing down Monday depends largely upon either quickly rejecting a spike up, or simply maintaining any immediate break below 1140.00. Even in the latter case, a drop may be limited only to retesting Friday’s 1133.00 opening print, and not necessarily extending down.

Bottom line (My underlying premise)
No unfinished business above, but not rejecting a probe of the prior high. Low-volume Friday afternoon, but no pushback off of resistance, ahead of the weekend. The dark side of excessive optimism is fear to sell – in either case, not the stuff of sustained rallies. [/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.