Trading Plan for 10/16

If a bigger downleg was avoided Monday… then the bounce should extend higher Tuesday without delay. Especially if it is a detour that eventually resolves down, whether or not the detour were to probe fresh highs.

Pattern points… (Setups and technicals)[pay]
Closing above both the noon hour high and the prior session’s high, with unfinished business above, is a “hold-long” through the close setup. It is a little compelling for not appearing in an uptrend — a multi-session low printed Friday, and an even lower low overnight. If valid anyway, the bounce should extend at least through Wednesday morning.

The unfinished business above is Monday afternoon’s 1437.50 bias-up target. Its 1431.00 bias-up signal was not at all productive during the bias environment, and was nearly rejected at the bias environment’s exit. Nearly rejected doesn’t equate to being ejected.

But the target was attacked to within 1 point. Its test overnight or Tuesday morning would be quite capable of launching a downleg. Otherwise, extending higher would next targeting 1446.75-1448.50.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Monday’s closing action trended up, and the afternoon’s 1429.00 low printed before the last hour. Gapping down under it would trigger a “session-long decline. Monday’s positive close must be rejected immediately Tuesday just to resume the decline. Not rejecting it would be bearish.[/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.