Trading Plan for 11/25

[pay]Pattern notes.
Except for the open’s plunge to 1095.00, Tuesday’s cash didn’t cover any new ground. The overnight range had bounced between the 1099.00–1107.00 bias signals. And so did the cash session, once it had recovered 1099.00. In fact, the session essentially ended unchanged from Monday’s close.

The plunge to 1095.00 didn’t leave any unfinished business below, so it doesn’t require a retest. Its retest probably wouldn’t be a retest, but a new downleg. Any bounce off of 1095.00 was likely to be only obligatory, and doomed to failure from wherever it might peak.

Although the entire dip under 1099.00 was recovered, the buying pressure was wasted if it didn’t gain traction. Closing above 1105.00-1107.00 Tuesday would have meant buyers were gaining traction. Tuesday’s close couldn’t even hold above the morning’s 1105.00 high.

The whole bounce since Friday’s ineffectual pessimism is only obligatory, so it’s just a question of timing for a drop back down to (and through) last week’s 1083.50 low. Meanwhile, Monday’s test of last Monday’s pivotal high (the 1111.00 high prior to the 1112.00 actual high) still makes the actual high’s retest likely, first. And its retest is expected, until a downleg gets underway. There is limited time to produce either leg this week, let alone to reject a rally.

Indicators and Internals.
Tuesday’s bottom was easily predicted by the RSI action there. The last three 3-minute bars into the low were accompanied by RSI improving off of oversold conditions (see the lower-left of the nearby chart). The 1-minute RSI had already stopped deteriorating, and its recovery action confirmed. No other business was left unfinished.

Wednesday’s opportunities.
A break lower Wednesday under 1099.00 would signal a move underway back down to last week’s 1083.50 low. There’s a risk of sliding lower through the morning if 1105.00 isn’t recovered. The alternative – i.e simply not breaking lower – is likely to gravitate higher and eventually test 1112.00. Its path would be unpredictable unless 1107.00 is quickly recovered. Another big news day could attempt to trend both ways very early. But liquidity will evaporate noticeably by the noon hour, and volatility could disappear after the 1:00 Treasury auction.[/pay]