Trading Plan for 9/3

If not for the impending holiday weekend… would the morning’s decline have fallen as far as it did, or would it have fallen further? Not that the morning’s drop was very deep, but it was relentless. And the afternoon’s attacks on prior lows seems eerily and inappropriately optimistic.

Pattern points… (Setups and technicals)[pay]
Friday’s initial 15 minutes of volatility trended down, immediately undermining any recovery effort fro the balance of the day. In fact, the pattern never reflected any accumulative activity. But only the morning’s bias environment trended down.

The balance of the session was certainly choppy, and wide-ranging. That didn’t help two attempts to trend down, which were very productive, but also retraced entirely. Retraced… but not recovered.

The afternoon’s two slides to 1626.00 from 1632.00 and later from 1633.00 both reacted up sharply, each forming a “V” reversal. One “V” is not a bottom until retested without forming another “V”. Two “V” reversals only chip away at support. Friday’s last-minute reaction up from testing 1626.00 did at least recover back into the noon hour’s range at 1629.75. The reaction up extended to 1633.75 before the close. Had the setup appeared on any day other than ahead of a weekend, then it would have been considered for short-entry through the close.

Unless fresh lows have tested 1618.00-1621.00 — even if only Sunday night or Monday — no rally would be durable. Gapping up anyway Tuesday above Thursday’s ~1636.50 close could retest last week’s 1667.50 high before resuming the decline. Regardless, simply ranging sideways Tuesday is unlikely.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Don’t forget this being a holiday weekend, there is no Saturday Strategy Session. But the Chartroom will be available beginning Sunday night as normal for the Globex open. And I’ll have updates as price action makes necessary. Meanwhile, have a relaxing Labor Day weekend![/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.