Trading Plan for 11/11
[pay]Pattern notes.
Tuesday’s session could have slid under 1087.00 to reverse momentum down, however briefly. Testing it deeply enough, early enough – under 1083.00 through 10:15 – could have reversed momentum down permanently.
But 1087.00 was tested too early, overnight, for several hours without breaking lower. Chipping away at its support all but required probing it, which it was. But not until there was a no-bias environment in place, when trending would be undermined. And then not again until the noon hour, when noise is more easily absorbed.
Also, 1087.00 wasn’t probed until after the open’s rally up to 1093.00-1094.50. That created room to absorb 7-8 points of selling pressure without damaging the chart. Turnabout is fair-play, and the morning’s drop absorbed a late-afternoon bounce back up to 1093.00.
Tuesday’s sound and fury was just that, and only that. The cash session closed at the 1091.25 target met at Monday’s close. Neither buyers nor sellers gained any traction. Extending higher Wednesday would get a benefit of the doubt. It would also get a relatively tight pullback limit since Tuesday’s ranging didn’t confirm this to be any more than an extended corrective bounce, or just a retest of prior highs.
Indicators and Internals.
RSIs were fairly predictive Tuesday. Only one signal remained outstanding, which was the noon hour’s low being accompanied by oversold RSIs. Its relevance is already undermined by the timing, so there is no requirement for a retest.
Wednesday’s opportunities.
Tuesday’s close was barely positive on the day. But it did avoid triggering a Pivot Reversal setup under 1088.50. That would have been bearish, and still could be – by proxy, on an opening break under Tuesday’s 1085.00 low. Otherwise, like Tuesday, any shallower opening weakness would be unlikely to trend down.
Tuesday’s probes into 1093.00-1094.50 did clear the way for extending the rally above it, if recovered immediately at Wednesday’s open. Having hesitated there already, breaking higher should find little resistance at October’s 1097.00-1098.00 prior highs.
Government is largely closed for Veteran’s Day. The economic calendar is otherwise empty, and no news has been good news this week. That’s convenient, since bond pits are closed (electronic trade remains open), and unavailable to lay-off risk in case of decline. Maybe no news is good news, when the bond market is open… [/pay]