Trading Plan for 1/11

Trending up sharply overnight… expended almost all available buying pressure. Post-open action expended the rest. The question is whether sellers will exploit the situation, or just help to refuel it.

Pattern points… (Setups and technicals)[pay]
Tuesday’s cash session close equated to 1287.00. That was also the morning’s low. Closing under the morning’s low would have signaled that the day’s buyers gained no traction for their efforts. Instead, that is a borderline assumption.

We do know that buyers ran out of energy. Repeated probes above 1289.00  were all rejected. That’s what created the noon hour setup’s 4-point capitulation dive. Extending the rally requires new sponsorship — which probably requires gapping up. (“probably,” because it is only a borderline assumption that buyers gained no traction for their efforts.)

So, not gapping up Wednesday would be likelier to trend down intraday.

Overnight weakness has room down to 1281.00 before suggesting a bigger slide is underway. Any shallower dip through Wednesday’s open could be intended to refuel buyers — whether to extend the rally to 1296.00 or 1311.00, or just to retest Tuesday’s 1292.00 high.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Don’t forget this week’s unusual broadcast schedule. I will be available for about 30 minutes beyond the 2:00pm Beige Book release.[/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.