Trading Plan for 11/18

Thursday afternoon’s ranging… had two consecutive timing windows available to reject the noon hour’s plunge to new lows. Neither one recovered. Perhaps the delay was expiration related. Perhaps that will be the reason behind lower lows Friday.

Pattern points… (Setups and technicals)[pay]
Hours were spent ranging at session lows Thursday afternoon, waiting in vain for a fresh low under 1206.75. Dip after dip held at or above prior lows. There was n errant tick at 1206.50. But it wasn’t quite the 1204.50-1205.00 objective whose recovery could form a bottom.

Its 6-point reaction became a 10-point reaction when the range’s upper-end was attacked up to 1216.75. But that was just a test of 1215.00, whose resistance is the lowest buy signal until new lows are actually probed and recovered. Piercing at the close came too late to be actionable.

The two paths higher are either to recover from probing fresh lows, or to immediately recover 1225.00-1230.00. It is probably too late for the former, which would have been helpful Thursday afternoon. The latter would be only temporary, leaving outstanding a gap back to Thursday’s close.

Considering the relevant weakness following Wednesday’s Expiration Indicator, almost any recovery attempt would be viewed suspiciously, as being likely to fail and reverse, and to resume trending down.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Whether trending down without delay, or first bouncing, resuming the decline Friday could become very ugly. Testing 1204.50-1205.00 Thursday afternoon would have triggered a corrective bounce throughout Friday morning. Now fresh lows might not bottom before 1190.00. And bigger support lies below there at 1178.50. This does not necessarily marginalize buyers — having extended down already on new, the expiration indicator is always vulnerable to inverting into a rally.[/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.