Trading Plan for 9/9

[pay]Pattern notes.
S&Ps were up about 11 points at Tuesday’s close. As they were when the session’s last hour began, as they had been for an hour before the noon hour. Up, that is, from Friday’s close. But this area also represented the cash session’s 1025’25 opening tick. Several intraday attempts to trend lower all failed, but nothing came of their recoveries. So, not much can be said for the quality of Tuesday’s buying, other than that it absorbed Tuesday’s selling.

For example, the open’s dive bounced back from 1019’00. Letting the drop extend just one more point to probe 1018’00 would have made its recovery meaningful. Instead, it meant sellers were impatient. Early afternoon selling was shallower, but actually more substantial due to its timing. Its recovery would have been meaningful had it probed prior highs. It didn’t.

Sellers lost traction by not preventing a close above 1018’00 Tuesday. They can still regain traction by closing under the low of the session that relinquished control, i.e. under 1019’00. A break under Tuesday afternoon’s 1020’50 low could evolve into something more bearish. Otherwise, the next opportunity for sellers to gain traction probably wouldn’t come before probing prior highs.

Especially if prior highs are tested sooner, rather than later. Trying again so quickly without first dipping to refuel buyers would be even less likely to succeed. Buyers lost the chance to gain traction either by gapping up above the decline’s last relative high around 1028’00, or at least by closing above it.  This makes it easier for the 1027’00 overnight highs to hold a retest, or else the 1038’75 prior highs.

So, while sellers lost traction on the effort they began at last week’s open, buyers didn’t gain traction by default. And they probably can’t get it by extending higher without at least recovering another dip to refuel buyers. If sellers regain traction first, then buyers since Friday’s close will be trapped and clawing to get out at almost any price.

Indicators and Internals.
Technicals left no new unfinished business. They did identify several major turning points, but all were fulfilled intraday.

Wednesday’s opportunities.
It’s an interesting day on the econ calendar. But the pre-open price action may be more important – if it breaks free of the 1020’00-1027’00 range. Otherwise, later reactions to Beige Book or other data may be much more comfortable returning back into the range.[/pay]