Trading Plan for 10/24

If not for the late Ebola headline… then Thursday”s rally was headed to higher highs. The open”s “session-long rally” setup required it. And overbought RSIs at the high intended it. But none of it was fulfilled before the close..

Pattern points… (Setups and technicals)
I fleshed out the headline”s impact on the signals in a post just before the close, linked here. If the news is a turning point in fighting the outbreak, then Friday”s open will likely gap down 24-25 points to attack and probe under the 1921.00 area. There is otherwise overbought RSIs requiring a retest at Thursday”s 1956.25 high.

There”s also a bigger recovery underway, which may still be proved only temporary, but meanwhile targeting 1984.00, with interim resistance at 1941.00-1943.00. 

The targets were put into play by Tuesday”s close above 1920.50-1921.50, which was retested at the low of Wednesday”s steep, deep reversal from 1941.00-1943.00. The round-trip didn”t reverse the trend down, and the following day closed even higher, giving the rally a big, big, benefit of the doubt.

What”s Next… (Outlook and opportunities)
An outbreak in one of the world”s most densely populated cities would have an economic effect. Just the fear has an economic effect. Thursday”s news is not inconsequential. But it is not directly financial, so the rally is likelier to extend so long as Friday”s open doesn”t reject it immediately.