Trading Plan for 11/21

If Tuesday’s buyers will be rewarded like Monday’s buyers were… then will there be more than a momentary blip-up to fresh highs? Only if Tuesday’s own fresh high was indeed the reward to Monday’s buyers. Otherwise, both sets of buyers still have some change coming.

Pattern points… (Setups and technicals)[pay]
Tuesday ended essentially where it had begun. Where Monday’s buyers had gained traction and deserved to be rewarded, Tuesday’s buyers also earned a reward for absorbing extended overnight selling and deep intraday selling pressures. Tuesday also ended essentially where it had begun, testing 1384.25, which was Monday’s cash session close.

Tuesday did produce fresh highs. But only briefly during the noon hour. That’s hardly a reward for Monday’s buyers. Now, with Thanksgiving’s seasonal bullishness upon us, Wednesday’s session has an opportunity to reward both Monday and Tuesday’s buyers with a bigger morning rally.

In fact, 1384.25 was being tested at least 3 minutes before Tuesday’s cash session close. And then it was recovered, suggesting to hold-long through the close. Back under 1384.25 would introduce too much risk to merit the exposure. Not already extending higher before Wednesday’s open would be suspicious, too.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Wednesday afternoon volume tends to evaporate quickly as traders leave early for the Thanksgiving holiday. Volatility tends to go with it, limiting lower-risk trading opportunities. Whatever trending — up, or down — Wednesday’s session intends to accomplish should be accomplished before the afternoon.[/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.