Trading Plan for 9/4

If Wednesday’s dip had begun any earlier… then Wednesday’s close would have been well into negative territory. An interesting determinant between strong-handed and weak-handed timing.

Pattern points… (Setups and technicals)[pay]
Wednesday morning’s bias timing window outlasted a break under support, which qualified its later sellers as being weak-handed. At least, that label correctly predicted the bias-up signal would support the bias environment’s low.

Perhaps being labeled correctly as weak-handed, the selling was unable to close in negative territory. Not for lack of trying, since the noon hour’s and the afternoon’s lower low did probe negative territory.

But the burden of proof wasn’t on sellers, so they could afford to be patient. Buyers didn’t reject the selling. Closing unchanged wasn’t the issue. Not retracing back above at least 61.8% of the afternoon’s range does keep control with sellers. And the late bounce peaked upon retracing exactly 61.8% of the afternoon’s downleg.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Traction, or not, closing unchanged does keep the door open to Wednesday’s selling being “ineffectual pessimism.” But the open must gap up in that scenario to avoid probing under Wednesday’s lows. And despite leaving outstanding Tuesday night’s “new Globex trend extreme” that requires an intraday retest, this is a dangerous place for the rally to start challenging support.[/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.