Trading Plan for 9/30

If a session-long decline had actually gained traction… then the setup would have leveraged the weekend’s impending illiquidity to trend down sharply intraday. Did that same illiquidity inhibit the setup from gaining traction? We’ll see, when the new week begins.

Pattern points… (Setups and technicals)[pay]
A session-long decline setup can influence an entire session because it is triggered against all odds. The prior session will have trended the opposite direction into its close. All of which must be retraced overnight for the open to immediately reject the prior close’s trending.

Typically, fulfilling the setup will produce fresh session lows through almost every timing window, including new lows in the final hour. And if successful, the setup typically also influences the following morning. But Friday’s opportunity only kept the market at or under Thursday’s lows. It’s no small feat, but neither is it the setup’s normally great feat.

Friday’s close only tested the 1685.75 level that gapping under had begun signaling session-long decline. It was not recovered, so the setup wasn’t invalidated. A decline Monday morning gets a benefit of the doubt. Not a hold-short over the weekend, but a credible short if Sunday night’s price action were to trend down.

Buyers gained no traction for their effort Friday, so the path higher requires gapping up above Friday’s 1686.75 highs. That’s not so difficult since it was being tested at Friday’s close. Gapping up above Thursday’s 1693.00 close would be more reliable for neutralizing sellers.

[/pay]What’s Next… (Outlook and opportunities)[pay]
We will be having the weekly Saturday Strategy Session at 9:30am ET. Its location is linked from the blog’s sidebar. Please join us for a discussion of the market’s bigger picture, and to review any stock charts you may request.[/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.