Trading Plan for 10/22

If Wednesday”s open doesn”t gap down… then this rally will no longer be considered just a temporary corrective bounce. And not just any gap down. Rejecting an opening surge might work, too, but would depend on multiple consecutive timing windows extending down, too.

Pattern points… (Setups and technicals)
None of which precludes a pullback from beginning at some point Wednesday. But probably not until probing fresh highs since its buyers gained traction. That is, Tuesday afternoon”s bias environment was exited above the noon hour”s high, and the 3:10-3:20 timing window trended to fresh highs after the final hour”s entry was muted.

Reversing down from fresh highs Wednesday morning no higher than 1941.00 could start to reinstate the corrective bounce label. That would require extending down into the afternoon and not recovering, so the close would have to confirm.

Otherwise, this is no longer a just a temporary corrective bounce. It might only retest the 2012.75 high by proxy, not actually recovering all the way to it. But that”s still much higher at 1984.50.

What”s Next… (Outlook and opportunities)
Tuesday”s cash session close equated to 1934.75. Futures extended to 1939.75 before the Globex open. The difference isn”t so astonishing as the recent frequency of these wide spreads between the cash and futures close… This allows gapping down under 1927.25 and extending under 1921.25 to form a credible session-long decline setup. Alternatively, a Pivot Reversal could from after a shallower gap down recovers to momentarily test 1941.00 before reversing down more substantially. Outlasting the open without beginning to develop either bearish setup would likely marginalize sellers through the noon hour.