Trading Plan for 9/8

[pay]About that close (How the prior session ended)
Tuesday’s session-long decline fulfilled its potential for the session low to print during the last hour. Twice. A 3-1/2 point bounce from the 1090.25 3:00 low soon cratered to 1089.75 before the cash session close. The session ended under all prior intraday lows.

Pattern points (And technical influences)
The open gapped down, and the entire session developed in negative territory. The afternoon maintained a probe of fresh lows, closing under the prior session’s low. Yet, the last hour’s lows barely pierced Thursday’s highs as support.

And the prior highs pierced by Tuesday’s lows weren’t even regular session – they printed above Tuesday’s 1089.25 intraday high. That’s optimism. So, there’s probably more pessimism to come. How much more pessimism, and when, is key.

A dip under 1089.00 could extend down to 1085.50 before sellers started gaining traction for a much bigger slide. Recovering from an immediate dip could launch a rally targeting 1100.00 or 1105.00. Rallying first to either target Wednesday would refuel sellers for another downleg attempt.

Volatility might hibernate temporarily ahead of Wednesday afternoon’s Beige Book. The reaction might be exacerbated by the impending Rosh Hashanah holiday that begins at sundown, pushing a lot of trading forward as many traders try to leave early.

Bottom line (My underlying premise)
Sellers had marginalized since last Wednesday. Tuesday’s pessimism doesn’t mean sellers have yet returned. But any failure to hold support or to recover resistance should bring out more signs of sellers retaking control – if they intend to, at all.[/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.