Trading Plan for 11/18
If last week”s trend change warning hasn”t lapsed by now… then it may still be able to undermine a probe of fresh highs. Either way, a probe of fresh highs is likely next, unless sellers take immediate control Tuesday.
Pattern points… (Setups and technicals)
We”re always looking for clues to which sponsorship is strong-handed. One of the simplest characteristics is a dip that probes under support, but then recovers its test through a relevant timing window. Similarly, not maintaining a probe above resistance can be revealing.
Revealing, of what? Not necessarily near-term direction, but of sponsorship strength.
For example, Sunday night”s probe under Friday”s low was retraced before Monday”s open. Not entirely, but at least back above the prior low that was being probed. That didn”t prevent another sell-off, and it didn”t require extending the recovery. But it did suggest another sell-off would recover, while the door was open to extending the recovery.
Monday did neither. Which is also revealing — at least, the degree to which it did nothing. A bounce back to the range”s upper-end at Friday”s high was retraced entirely back down to Friday”s low. A lot of noise? Yes, but purposeful.
Like Friday morning”s wide-ranging choppiness, the market is busting at the seams of its week-old narrow ranging. It is axiomatic not to expect ranges to last forever, so that much is obvious. But the failed attempts to break lower and the repeated attraction back to the range”s upper-end does suggest at least a temporary break higher is coming.
What”s Next… (Outlook and opportunities)
Add to the foregoing that last Monday”s trend change warning has likely been absorbed by now, especially after closing above 2035.00. The result is an even greater likelihood for resolving in the next timing window — and resolving up. Whether only to 2048.50, 2051.00 or higher, fresh highs would still be vulnerable to being only a false break that reverses down much more substantially to make the trend change warning credible.