Trading Plan for 11/10

SummarizeDayAndPositions [pay]

Pattern points… (Setups and technicals)
When Tuesday morning’s new high (circled green) probed Friday’s prior high, Monday’s 1214.75 low (circled red) became the last relative low. Closing under it Tuesday signaled the trend was reversing down.

The narrow ranging since Friday doesn’t change the break’s relevance – but it does make the signal easier to invalidate. Trend changes aren’t confirmed like breakouts, which require extending the following day. A valid trend change must only avoid reversing the following day.

So, closing under 1214.75 would confirm the trend has changed direction, even if that close were positive. A bounce has room up to 1218.75-1220.25 before buyers could begin gaining traction.

Tuesday’s last-minute bounce did not recover above a prior low, making a recovery Wednesday unlikely without first probing fresh lows. In fact, Tuesday’s 1206.25 last-minute low was accompanied by oversold RSIs, which requires its eventual retest.

What’s Next… (Outlook and opportunities)
Failing to hold a retest of Tuesday’s low would put into play a test of “lower prior highs” at 1193.00. Gapping down to the 1193.00 area could make the past four sessions into an Island. It’s a rare setup, but it would extend down sharply without delay, next targeting 1180.00-1182.00. No further bounce is needed before extending down, but a test of 1215.00-1217.00 should fail quickly to avoid gaining traction. [/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.