Trading Plan for 9/6

More bad news thrown at… the market, more sell-offs and swings. But essentially, no more than noise. Wednesday’s range held intraday, but probably won’t do that again one day before Friday’s big data.

Pattern points… (Setups and technicals)[pay]
For all of Wednesday’s drops and plunges, none fully retraced Tuesday afternoon’s surge. Its singular upleg from 1399.00 to 1408.00 has been retraced several times back down to 1400.00-1400.50. But no lower.

The timing and structure of Wednesday afternoon’s surge already suggested that its sponsorship was strong hands. Extending higher is not he proof — although the effort is pointless otherwise. So long as the 1399.00 origin of Wednesday afternoon’s surge is not retraced, there remains potential to for another upleg.

Actually, 1399.00 was probed already, overnight before Wednesday’s open. Overnight retracements are irrelevant. Another fresh low Wednesday night need not recover before Thursday’s open, and still be able to recover intraday. The trick would be in quickly rejecting any lower low.

That having been said, the preference is not to probe lower lows again, at all. The pattern gets difficult to track bullishly from too much lower. Avoiding a fresh low requires probing a lot of overhead resistance at 1405.00 and 1407.00.

[/pay]What’s Next… (Outlook and opportunities)[pay]
A lot of news comes pre-open Thursday. The market has been reacting down to bad news, but only temporarily. Not rallying sharply on any positive surprise would be a concern.[/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.