Trading Plan for 10/21

If Monday”s pattern were accumulative… then one or two individual moves would have retraced intraday and extended higher. Monday”s price action was a series of swings that happened to be biased-upward, with no meaningful selling pressure to stop its advance.

Pattern points… (Setups and technicals)
Monday afternoon”s sequence of higher highs and higher lows looked a lot like trending. Sunday night”s gap up that extended to probe Friday”s highs appeared to be intent, too. But each was just a different version of noise in the range. 

Only one intraday buy signal (and there were plenty) extended higher than its first 3 minutes, so no new sponsorship was attracted. The rally was fueled by a myriad of itty bitty accumulative patterns that aren”t really accumulative patterns individually, but behave that way collectively, kept the upside pressure going.

Extending higher grudgingly and not from any accumulation can persist indefinitely. Rallying on repetitive minor swings is an unstable base to launch trending. And each interim dip (circled red on chart) was neutralizing the support of another “lower prior high” (highlighted green). Their support will be sorely missed if/when this phase of the recovery attempt ends.

Meanwhile, buyers did manage to gain traction for their efforts. The bias environment was exited above the noon hour”s high, and the final hour was entered above both. Fresh highs are likely Tuesday morning, presumably up to 1901.50 or 1906.50. Higher highs than that are possible if not rejected through the open.

What”s Next… (Outlook and opportunities)
Only gapping down under Monday”s 1888.25 bias environment low would prevent extending higher. There is plenty of “unfinished business below” to attract price down — from the no-bias trending above Monday afternoon”s 1890.00 bias-up signal, to the morning”s offsetting test of its 1874.00 bias-down signal.