Trading Plan for 11/11

If Friday bias environments aren’t exited under a prior low… then it’s nearly impossible to reverse trending that the bias environments produced. That caveat was proved out once again when Friday morning’s recovery kept drifting and drifting, higher and higher. Regardless of the steep slope and depths from which it recovered, Friday’s rally was really just noise in the range.

Pattern points… (Setups and technicals)[pay]
Friday’s recovery wasn’t satisfied with retesting the 1756.00-1757.00 resistance, or with fulfilling the morning’s 1758.00 bias-up target. Although the afternoon’s bias-up signal was touched by 1:20, the recovery wasn’t satisfied with only triggering no-bias, either. Exceeding the bias-up signal through 1:30 invalidated the no-bias, and the balance of the session trended up to 1768.00.

That was a new high close.

This new high close doesn’t require any higher close, since it wasn’t a new trend high. Not by long-shot. Friday’s high was 2-5 points under the prior Wednesday’s highs. It was under the next Wednesday’s high, and 3-6 points under Thursday’s highs.

That last high includes a pre-open touch of 1774.50 that doesn’t require being retested. But now it very well may be retested, since price is back in its orbit. Probing it up to 1777.75 would be an appropriate reward to Friday’s buyers that kept sellers from retaking control.

Of course, that would assume Friday’s buyers actually retook control. Having trended up into the close, gapping down under the afternoon bias environment’s 1758.25 low would trigger a “session-long decline.” Any shallower opening weakness would be likely to recover and probe new highs. No opening weakness might be probing new highs already overnight, greeting the week with extreme sentiment…

Friday’s new high close makes a suspicious new trend high for another reason — it’s pre-open low was a “new Globex trend extreme” in the opposite direction. Since Thursday’s high actually was a new trend high (remember, that’s why Thursday’s close under prior lows was disqualified from signaling a trend reversal), Friday’s pessimistic reaction to the Employment Situation report does require a retest. Intraday.

Now, about greeting the week with extreme sentiment…

[/pay]What’s Next… (Outlook and opportunities)[pay]
Don’t forget that there is no Strategy Session this weekend. We’ll do one Monday afternoon, and then return to Saturdays next weekend… Once again, my thanks to everyone for indulging my past two weeks of truncated hosting and staggered schedules. [/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.