Trading Plan for 10/27

Another round-trip to the precipice and back… It would seem the invisible hand saved us again from going over the edge… Or, is that what they want us to think? Back in the day, this setup would have squeezed the market back up to the highs before lunch (shorts being the main course). Somebody’s slipping…

Pattern points… (Setups and technicals)
Monday’s hold short through the close under 1183.00 produced its 1174.00 target at Tuesday’s open. Recovering 1179.00 through the first half-hour sealed the session’s low. It also made the pattern vulnerable to a squeeze. The only rally it produced barely filled the gap back to Monday’s close.

The balance of the day ranged between 1178.00-1183.00. Consolidating into and out of the noon hour was even narrower (circled red), and isolated to the range’s upper-end without extending higher, i.e. “ineffectual optimism.” A drop back down to 1178.00 offered another opportunity to squeeze shorts. Once again, price only climbed back to session highs.

A nominal fresh high up to 1183.75 through 3:10-3:20 never gained traction (squared red). It reacted down 3 points, well back into the range. It recovered, after the position-squaring window, and after the cash session close. Tuesday morning’s 1188.50 bias-up signal and 1194.25 bias-up target were undermined by never recovering positive territory. Their objectives would be reinstated if any bias-up were triggered.

What’s Next… (Outlook and opportunities)
Buyers gained no traction from Tuesday’s borderline “ineffectual pessimism.” And that means the only way to advance higher is to gap up. Tuesday’s 1188.50 and 1194.25 bias-up parameters would be in-play. Otherwise, almost any failure to recover positive territory through Wednesday’s open would resume the drop underway since Monday morning’s high.

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.