Trading Plan for 11/17

Last Tuesday’s trend change signal was renewed by Tuesday’s close under another prior low. That is potentially bearish. It is also potentially bullish, because a fresh signal can be invalidated the following day. A much bigger drop is likely if Tuesday’s signal is valid. [pay]

Pattern points… (Setups and technicals)
Last Tuesday’s close under 1215.00 had signaled the trend was reversing down. This was the interim low between the rally’s two most recent new highs. Recovering it through the following close would have invalidated the signal.

1179.50 is the prior relative low, and this Tuesday just closed under it. A new trend change signal has triggered. Closing Wednesday back above 1179.50 would invalidate the signal. Otherwise, the signal would be confirmed, and last week’s signal would be renewed.

Tuesday’s post-open slide fulfilled the long-standing objective at 1180.00-1182.00. Closing under it then signaled the next lower objective in-play. Closing Wednesday back above 1180.00-1182.00 would invalidate the signal.

1158.50 is the next lower objective put into play by closing under 1180.00-1182.00. The rally up had left outstanding unfinished biz at 1166.00. Invalidating either signal would suggest a corrective bounce was underway targeting 1217.00.

What’s Next… (Outlook and opportunities)
Intraday trending tends to come in pairs or more, if at all. Trending just once intraday is unusual. Trending only once intraday should be followed by immediate trending at the next session’s open. Only Tuesday morning trended, so trending is very likely to greet Wednesday’s open.

Having ranged sideways since late-morning Tuesday, a refueling bounce is possible. An overnight refueling bounce could be rejected overnight, or into Wednesday’s open. In case of an overnight bounce, Wednesday’s open should trend from the opening print, regardless of whether the opening print were a gap up.

No bounce is required before extending down. Buyers didn’t gain any traction during Tuesday afternoon’s ranging. The decline is free to resume at Wednesday’s open. [/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.