Trading Plan for 9/4

It’s a holiday weekend, so there… is no Saturday Strategy Session. Please don’t hesitate to make stock analysis requests in the comments section of this blog post. Oh, and have a Happy Labor Day!

Pattern points… (Setups and technicals)[pay]
One day after another, the week continued testing and retesting 1411.00 resistance. And every test was still failing. Finally, Thursday gapped down to 1402.25 and stayed down. Then Friday gapped right back up, again testing 1411.00. Which held. Again.

Actually, 1411.00 was tested before the open. Its late-morning retest followed an interim dip to 1397.00. So, actually, 1411.00 resistance held two more times on Friday.

1411.00‘s repeated tests as resistance during the past two weeks continue to behave as distribution. But its reactions down do not. Thursday’s gap down wasn’t likely to extend. In fact, Thursday’s sellers gained no traction for their effort. But after Friday’s retest of 1411.00, its reaction back down into Thursday’s range could have extended — and did not.

Another break lower would be just as capable of extending down. But two failed attempts to break lower should be rewarded with fresh highs back above 1411.00. The only question then would be whether 1419.00 holds as resistance, or breaks higher to test 1428.00.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Globex opens normally Sunday night, and trades through Labor Day morning until 11:30 ET. Some of the above scenario could play out then. Alternatively, more counter-trend action could mark time until Tuesday morning. But keep in mind that a break lower would be just as capable of extending down.[/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.