Trading Plan for 11/13

If not for the dovish Fed speaker’s surprisingly hawkish statement… then Tuesday morning’s recovery probably would have probed fresh highs. The question now is whether that effort was knocked off track, or if it can regroup.

Pattern points… (Setups and technicals)[pay]
Tuesday’s selling pressure was relatively shallow as expected. Not expected would the be the extra pullback, or the delay in recovering from the pullbacks. In fact, we’re still waiting.

But every probe under 1763.00 returned to 1763.00 before producing a fresh low. Eventually, a recovery to 1763.00 extended through it, then recovered from dipping to 1763.00 before the close. The last low was no-bias trending likely to retrace back to 1763.00, and it was. The close maintained the final hour entry’s recovery above the noon hour and bias environment highs, after the bias environment had probed fresh session lows.

All of which suggests that sellers were weak-handed held.

None of which suggests that buyers are strong-handed.

But buyers had better prove soon that they’re strong-handed. Pullbacks are no longer likely to be shallow, and they’re not likely to be recovered. Unfinished business above at 1769.50 should be retested early Wednesday if at all. And that could be extended to retest last Thursday’s 1774.50 high, potentially up to 1777.75 and 1779.50.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Tuesday’s choppiness seems to have been a function of absorbing the morning’s reaction to an otherwise dovish Fed speaker seemingly receptive to tapering. Think of that as a sucker punch, and then picture the market staggering around the ring as it struggles to stand back up. The market is prepared to duck or absorb being blind-sided again by the same headline, so better trending should be more reliable.[/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.