Trading Plan for 9/9

The bounce’s highest calculable target… was met by Thursday’s highs at 1197.00-1198.00. No unfinished business was left above, and a reversal pattern triggered. What could go wrong? [pay]

Pattern points… (Setups and technicals)
RSIs were on the cusp of being overbought at Thursday’s 1198.00 high. The reaction down from there to 1176.25 gained traction by closing under prior lows. But that does not prevent a detour that probes fresh highs.

Thursday’s session formed a Pivot Reversal — its new trend high intraday interrupted a counter-trend open and close. Closing below the open tends to be even more bearish. Often, it is immediately bearish.

Occasionally, it is not immediately bearish. Delaying the next downleg too long past the open would become increasingly likely to bounce. And a bounce would be increasingly likely to retest Thursday’s highs (up to 1201.50). But the pattern would be just as likely  to fail.

Regardless of when it might begin and from where, a downleg would target either end of Tuesday’s range — the gap back to its 1158.50 close, and the morning’s excessively optimistic 1133.50 lows.

What’s Next… (Outlook and opportunities)
This being a Friday, the morning’s bias signal is likely to persist through the noon hour. So, not triggering bias-down could prevent trending down before next week. Otherwise, almost any other opening setup is vulnerable to declining into the weekend… Here’s the link to Thursday’s Market Wrap.[/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.