Trading Plan for 10/11

If Thursday closed higher… then a multi-session rally could be underway. At least, that’s what I warned in this space yesterday. Thursday did close higher. Substantially higher, by gargantuan proportion. Like Thursday WAS a self-contained multi-session rally. But no matter how much buying pressure has been expended already, not extending higher depends upon reversing down soon.

Pattern points… (Setups and technicals)[pay]
Thursday’s “session-long rally” was fulfilled in every aspect but one, sort of. The close did not tick upward to fresh highs, only back to within 1 tick of the 1687.75 high. Well, it wasn’t a requirement. Anyway, after producing all of the setup’s other characteristics, the following morning tends to trend upward, too.

Overbought RSIs at Thursday’s high could help to resume the rally’s momentum Friday morning. A bias-up would give purpose to a morning upward trend. Also, closing above the 1684.00 gap now makes the last prior higher gap at 1688.00-1689.00 an attraction.

What could possibly go wrong?

Regardless of the size of Thursday’s rally, and regardless of what relevant levels or how many it recovered, it lacks one element: Confirmation of a second consecutive higher close. Probing fresh highs all morning could still resolve down into the weekend, but that would be unusual.

[/pay]What’s Next… (Outlook and opportunities)[pay]
This being a Friday, the morning’s bias tends to persist through the noon hour. And strong-handed countertrend  sponsorship then becomes difficult to generate with the weekend’s illiquidity fast-approaching. So, not trending upward Friday morning, or truncating a buy or bias-up signal, would suggest that Friday Factor safety net doesn’t exit.[/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.