Trading Plan for 10/29

If Tuesday afternoon”s rally weren”t so steep… then this entire recovery leg might be more assured of extending much higher. But its steepening slope now places that responsibility on Wednesday”s shoulders, and on whether it can close above the next objective without any interim pullback.

Pattern points… (Setups and technicals)
The template being tracked through Monday”s close was a product of the intraday repressed buying pressure, sellers failing to gain traction despite trying, and buyers not gaining traction despite having unfinished business above. All of which indicated that any path higher Tuesday would gap up to and through 1963.50 and extend sharply higher with potential to 1984.25.

Tuesday”s open did gap up, and the session did extend sharply higher. But the gap up didn”t extend until the afternoon. And then it compensated for its delay, adding 10 points above the morning”s 1968.50 test. 

Closing above 1963.50 has put into play 1984.00. Closing above 1976.00 made holding-long through the close compelling. The only question seems to be timing, since buyers gained traction by exiting the bias environment above the noon hour”s high and then entering the final hour higher.

What”s Next… (Outlook and opportunities)
Rallying should be inhibited ahead of the afternoon”s FOMC policy statement. The proximity to 1984.00 could be predictive for the actual reaction.