Trading Plan for 11/21
[pay]Pattern notes.
Thursday afternoon’s slide to ESz 745’00 furthered the distance from a potential bottom around ESz 787’00. This doesn’t mean a bottom cannot form here. The original opportunity is out of reach, of course – not the parameter for 2-3 days of intraday sell-offs that each recover through the close, but the requirement for those recoveries to close back above 787’00.
In place would be a 2-3 day consolidation that probes 745’00 below and 780’00 above. This would preserve the template that sellers run out of steam in the sessions after 787’00 is met. It would also preserve the template that keeps optimism in-check and impossible to be confused as being “excessive.”
The shark circling around this sinking ship is a second consecutive lower close – under Thursday’s 745’00 low. Regardless of the break’s size, Thursday’s drop is still only one break under prior lows. It is still young and fragile. And vulnerable. Not vulnerable to reversing up, just vulnerable to not continuing down immediately. So, not closing under 745’00 Friday would be constructive to a potential bottom. Otherwise, look out below.
Indicators and Internals.
MACD & RSI diverged positively into Thursday’s 745’00 low. Three hours into the overnight Globex session produced a test of 759’00 where negative divergences have produced a pullback, ending any technical obligation.
Friday’s opportunities.
A higher high has room up to 762’00 just as normal fluctuation. Above 765’00 would target 780’00-782’00 so long as pullbacks then hold 758’00. Under 750’50 would instead target a retest of Thursday’s lows. The latter scenario would be healthier, if its test of Thursday’s low waited until Friday’s cash session open. Otherwise it would leave open a gap wanting to be filled. It would also help to recover the test by 10:15, because this being a Friday, initial trending would be likely to persist past the noon hour. So any hopes of a forming a bottom rely upon delaying a lower low or avoiding it without being too optimistic.[/pay]