Trading Plan for 10/29

If strong-handed buyers are growing in force… then is it bullish that they weren’t excessively optimistic before the weekend? The range’s upper-end held a test as resistance. Its reaction down fell back into the range. Either that is patient buyers, or the beginning of a new downleg.

Pattern points… (Setups and technicals)[pay]
There’s not much to add here about the market’s current situation, that hasn’t already been in much of Thursday and Friday’s posts. The opportunity is great for a bottom to have formed. Not only have all downside objectives been fulfilled and neutralized, but repeated attempts to extend lower were rejected. More so, the resolution rallied back to the range’s upper-end.

Selling pressure has never been thinner at such low levels.

None of which is to say that the opportunity for a bottom has been exploited. In fact, Friday afternoon’s rally peaked upon touching the 1412.50 target, instead of breaking higher, which the afternoon timing window combination would have allowed happily. Also, instead of leaving buyers pent-up at support, they were expended at 1412.50, which doesn’t leave any upside objective through the weekend.

So, while the past week’s trading range could be bottoming that can launch a full recovery, it remains capable of breaking lower to resume the decline to much lower levels. At least Friday did not close with sellers regaining traction. But Monday’s close or Tuesday’s open should resolve the situation either way..

[/pay]What’s Next… (Outlook and opportunities)[pay]
There is no Saturday Strategy Session this weekend, so we had an extended Market Wrap Friday that included a bigger picture review. Its recording will be linked from the blog’s sidebar.[/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.