Trading Plan for 11/16

If Thursday’s test of the decline’s objective intends to hold… then can it range narrowly so narrowly for another day? No. Thursday’s narrow range is already suspicious, if sellers were satisfied already. Tick, tock.

Pattern points… (Setups and technicals)[pay]
Thursday’s 1350.50-1351.00 close was essentially flat with Wednesday. That’s bad news for anyone expecting a rally. Two consecutive sessions tested the same lows without strong-handed buyers appearing.

Worse news is that Thursday’s lower lows were relatively shallow. The decline’s 1348.00 objective was met already during the morning. Yet, the afternoon’s bounce was retraced almost entirely back down to its 1345.50 origin.

Even worse news is what Thursday afternoon’s retracement did after coming within 1 tick of 1345.50. It launched a 7-1/2 point bounce. That’s not arbitrary noise. And having coming so close to the low first, a fresh low should print at some point. So, the bounce was optimism. A lot of it, which is not the stuff of a durable bottom.

Perhaps a brief, fresh low Friday morning can be rescued (from 1342.25?) before it gains traction that extends down to 1324.00. The bearish Wednesday Expiration Indicator suggests that would be futile, since the afternoon should be biased downward.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Since buyers gained no traction Thursday, any credible rally would begin by gapping up. And this being expiration, the morning’s trending would be difficult to reverse. The good news is that there’s an attraction back up to overbought RSIs at Thursday afternoon”s 1356.50 high, but it becomes bad news if testing holds as resistance. [/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.