Trading Plan for 11/24

Artillery fire, or not, the bounce from last week’s lows wasn’t sustainable. Last Wednesday’s 1177.00 close had confirmed the trend change that was signaled one week prior at 1215.00. Since filling the gap back to Wednesday’s close Tuesday, the market hasn’t behaved as if it’s done dropping. [pay]

Pattern points… (Setups and technicals)
Tuesday’s open gapped under Monday afternoon’s last relative low. This triggered a session-long decline since Monday’s close had trended up, and the afternoon’s low had printed before the last hour. The signal helped to suspect any rally attempt Tuesday, and no rally attempt succeeded.

The signal often prints its session low in the last hour, but Tuesday morning’s low has yet to be retested. The delay suggests that revisiting Tuesday’s low would not be a retest to form a durable bottom, but a new downleg to trend down.

The next lower objective is 1166.50, and its test Wednesday might expend too much selling pressure to avoid a corrective bounce. Any probe under Tuesday’s 1174.75 low that recovers back above 1177.00 would also rob sellers of near-term traction. Recovering 1181.00 through any relevant timing window could marginalize sellers for the balance of the day.

What’s Next… (Outlook and opportunities)
Plenty of economic items are scheduled for release Wednesday, crammed into the calendar because of the holiday-shortened week. One wild card is pre-holiday volume, which will soon start slowing considerably. Korean hostilities is another wild card. Overnight action will be very revealing.[/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.