Trading Plan for 10/25

If the market is in topping mode… then Thursday’s session must be its turbulence. That tends to happen at high altitudes, when descending from the clouds for landing. Of course, it could have been wind shear, which often ends badly.

Pattern points… (Setups and technicals)[pay]
The air is definitely thin up here. Thursday morning’s whipsaws were amazingly choppy. The productive signals weren’t very productive (barely 2 points if that) and plenty of noise from probing signals for no longer than 3 minutes or by more than 3 ticks.

Oversold RSIs at the open’s 1740.00 low require a retest. Their attraction kept inhibiting the morning’s recovery efforts from actually trending. But the attraction remains outstanding “unfinished business below.” Optimism won. The other extreme was the afternoon’s 1749.00 high, which stopped pessimistically short of filling the gap back to Tuesday’s close.

In between those two extremes there were multiple overlapping legs, all ranging around the open’s 1745.25 high. Thursday’s upward bias only stretched the rubber band thinly. It can stretch it more, to retest Wednesday night’s 1751.75 high and Tuesday’s 1754.50 high — potentially up to 1760.25. But maintaining any higher high remains to be seen.

[/pay]What’s Next… (Outlook and opportunities)[pay]
This being a Friday, the the morning’s bias signal is likely to persist through the noon hour. Meanwhile, since closing action trended up, gapping down under the afternoon bias environment’s 1744.50 low would trigger a session-long decline.[/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.