Our plan always starts with knowing our neighborhood. We need to map all key levels and trendlines we are likely to encounter today.

From there, we have to prioritize the levels we expect to be today’s inflection points – the so-called lines in the sand – so that we don’t end up on a side road. Obviously, some lines and levels are more important than others. It would help if you similarly mapped any instrument you trade.

Futures are just underneath yesterday’s high, and also 12 handles off of the overnight high, so we don’t fit the definition of shock and awe, but some fade may still be in the cards given where we are. In a fade, target the bottom of the single prints at 4238 initially and monitor for continuation.

 
Obviously, any failure of countertrend activity would be construed as bullish (WWSHD) if over yesterday’s high. As the S&P 500 index made the all-time high in an overnight session, we consider it less secure than regular session one. Auctions will usually not end this way.

As the market is contemplating the important FOMC meeting starting today with an announcement tomorrow, there is also potential for further balance. Never discount this outcome.

Friday is quadruple witching – so I likely will await tomorrow’s decision and look to trade on Thursday.

Yesterday’s low is my line in the sand today.

Good luck today.

A.F. Thornton