Trading Plan for 10/18

If Wednesday’s close confirmed Tuesday’s late signal… then it would not be surprising for Thursday to rest a little on its laurels. But just a little, and not so deeply or for so long to allow counter-trending to gain traction.

Pattern points… (Setups and technicals)[pay]
1448.50 was recovered too late Tuesday to be reliable for putting into play new highs. Recovering 1452.00 through Wednesday’s open would have qualified. Recovering 1452.00 through the open still could have been invalidated by closing under it. No problem.

Actually, there was an attempt to avoid recovering 1452.00 by exiting the afternoon’s bias environment under its 1453.25 prior low. That was recovered. But the bias environment’s exit was under the noon hour’s high, the final hour was entered under the bias environment’s high, and the 3:10-3:20 window did not probe fresh highs. Its opening recovery held up through the close, targeting new highs.

1452.00‘s recovery can be invalidated by immediately breaking back under its prior low. That would mean opening through or under Wednesday morning’s 1448.50 low. So, there is that much room to absorb initial weakness Thursday without reversing momentum down. And initial weakness is possible since Wednesday afternoon never extended higher.

If a break back under 1448.50 were actually invalidating the signal for new highs, then it should be very productive very quickly.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Wednesday’s Expiration Indicator did not trigger. No prior high was probed intraday whose resolution could trigger either an active bullish signal or a passive bearish signal. At least three days of uptrending wasn’t rejected. So, there’s that.[/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.