Trading Plan for 9/30

About that close (How the prior session ended)
The morning’s no-bias environment had created the objective to test 1144.50. It was touched just before and after 2:30. The last hour began by plunging 7 points in 15 minutes to 1137.00. It touched 1136.00 30 minutes later. RSIs finally diverged positively to produce a bounce back to unchanged.

Pattern points (And technical influences)
The late plunge probed the afternoon’s 1139.75 prior low after the 3:10-3:20 window had begun. But impatient sellers prevented the 3:10-3:20 window from exiting back above 1139.75. Too bad. That would have provided new bearish context. And it is potentially bullish when sellers fail to exploit an opportunity.

Then the series of lows from 1137.00 to 1136.00 formed three swings that overlapped each other. This pattern is a Running Correction, and it also reflects impatient sellers. Unproductive sellers, too, since they expended a lot of energy just to attack the morning’s low without touching it.

Finally, RSIs improved while testing 1137.00 to 1136.00. Their positive divergence produced a bounce back above the afternoon’s 1139.75 prior low. The drop’s sponsorship was robbed of its traction. Now an immediate drop has room to 1133.50 before gaining traction for a bigger decline.

Wednesday afternoon’s drop was not a new downleg. It expended a lot of energy, but it was still an inside day. A downleg is still likelier to originate Thursday, and possibly not until failing another bounce. Another probe above 1144.00 could probe Sunday night’s high by 1 point up to 1150.75 before failing.
Bottom line (My underlying premise)
Monday morning’s combination of wide range, multiple swings, and quick reversals was amazing. It was all the more amazing for that not producing an explosive rally out of its bias window. Regardless, the action does suggest a major move is getting closer.

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.