Trading Plan for 11/19

If the pattern requires at least one more new high close… then producing it sooner, rather than later, would enable a bigger downleg than would simply extending down first.

Pattern points… (Setups and technicals)[pay]
Monday afternoon’s plunge from 1798.25 began precisely at 2:30 when the bias environment began lapsing. Its sponsorship is single-minded, and not the combination of earlier selling pressure. Its momentum can be fulfilled in a single timing window.

The drop’s 1784.75 low developed as a probe under the 3:10-3:20 timing window’s low. The probe recovered before the 3:37 position-squaring window opened, while 1-minute RSI diverged positively. Its sponsorship was weak-handed and gained no traction for its effort.

The low held 1785.00, which was very influential Thursday when that session’s buyers gained no traction for the morning’s new highs. Retracing the interim probe above Thursday’s highs is only partial consequence for extending higher on no traction.

And Monday’s close was at 1789.50, which was the morning’s unfinished business below. That created “equilibrium” by neutralizing its attraction without creating a new one — neither extending to close under it, nor bouncing to close above it. The next two trending attempts should be very convincing, and then reversed very decisively.

Monday’s session formed a bearish Key Reversal by gapping up to a new trend high, and then closing negative under the morning’s lows. Key Reversals are often temporary, because they leave outstanding the opening gap above prior highs. Monday’s opening gap is not outstanding, already neutralized after first dipping back into Friday’s range. Its resistance is substantial.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Extending down without hesitation has room down to 1768.50, if not an attraction there, before reversing up to retest Monday’s 1799.75 high. Extending up first would likely begin by gapping up to 1793.25-1794.00, holding 1791.50 as support, and then later reversing down from probing Monday’s high.[/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.