Trading Plan for 10/27

Wednesday’s rally didn’t wait long… to exploit the drop’s target having been met. It didn’t wait for an accumulation pattern to form. So, its recovery may be short-lived.

Pattern points… (Setups and technicals)[pay]
Wednesday’s late pre-open surge to 1239.75 wasn’t likely to gain traction, having broken above a multi-hour range so near the open. It only stretched the rubber band tightly for rejecting both bias-up parameters. And that put into play 1217.00.

1217.00 was met with no further delay. Was that a sort of inversion of the pre-open surge? Similar to the morning’s too-late breakout attempt, the post-open plunge stretched the rubber band pretty tightly, too.

The afternoon’s attempt to trigger a bias-down barely failed. And that was exploited easily, substantially, and well into the last half-hour. Perhaps the 1217.00 target neutralized much more selling pressure than anticipated. Regardless, the afternoon’s recovery also exploited the morning’s steep, deep sell-off. So, just how durable it is remains to be seen.

The morning’s renewed bias-up target would have been 1241.75, which held its test Wednesday afternoon. But just rallying through the afternoon’s bias environment already suggested the market’s intent is to fill the gap(s) back to Monday’s 1247.25/1249.50 close.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Thursday’s open were to gap down sharply to reject its recovery above Wednesday afternoon’s 1229.50 bias-up signal. Any less weakness would still be likely to recover, and at least to fill Monday’s closing gap.  [/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.