Trading Plan for 11/17

Wednesday afternoon’s plunge… wasn’t required. But the door to it was opened by waiting so long to fulfill targets below. And by first creating and fulfilling targets above. Buyers fully satisfied, sellers getting hungry, and the session close just ahead. No wonder buyers were nowhere to be found.

Pattern points… (Setups and technicals)[pay]
Wednesday’s session probed the prior two sessions’ lows, 1243.50 and 1241.75. And it reversed up sharply. Had that been the end of the story, then Wednesday’s expiration would be biased upward. But the bounce was retraced entirely. The probe under prior lows failed to hold.

It is certainly possible that Wednesday afternoon’s slide was exacerbated from being blind-sided by headlines. Banks sovereign debt exposure and European contagion have predictable reactions. The reactions to their reactions are predictable, too. They tend to be retraced.

The only question is timing. Wednesday’s expiration signal can be rejected by rejecting Wednesday’s close under 1243.50 and 1241.75. Recovering them immediately Thursday would suggest they weren’t broken by expiration position jockeying. Not immediately recovering them would confirm that expiration’s bias was not up.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Thursday morning’s econ reports are influential to price action. There has been a generally receptive atmosphere recently, so upside potential may be limited, but look out below in case of a negative surprise.[/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.