Trading Plan for 11/20

If Monday’s high is going to hold a retest… then it should be retested soon, like Wednesday. Tuesday’s ranging either ended a brief correction, or it is the beginning of something much deeper.

Pattern points… (Setups and technicals)[pay]
Tuesday morning’s probe under Monday’s lows was recovered to fresh post-open highs. There was no retracement along the way to refuel buyers. Extending that uncorrected surge back to Monday’s highs would have dictated its failure. It at least prevented any no-bias trending to rally.

But now, extending back to Monday’s highs on Wednesday would not be so assured of peaking. Tuesday morning’s excessively optimistic rally was reversed to a second fresh low in the afternoon, which helped to rid the market of being too optimistic. Retesting Monday’s highs might not peak.

It’s still possible to rally without trending down any further. since Tuesday didn’t extend Monday’s late plunge. But an immediate rally must still begin by gapping up — preferably above 1794.00, although gapping up Wednesday above 1792.00 would be credible for extending higher.

It’s also still possible to extend Monday’s late plunge since Tuesday didn’t reject it. Extending the decline at all past Wednesday’s opening 15 minutes of volatility at 9:45 would likely extend down sharply — not necessarily steeply — to 1768.00.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Monday’s equilibrium close exercised more than its minimum influence Tuesday. Multiple convincing trending attempts were reversed by convincing trending attempts in the opposite direction. Neither buyers nor sellers gained traction, so immediate rallying Wednesday should begin by gapping.[/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.