Trading Plan for 11/27

If low volume inhibits trending… then why was Monday’s range relatively narrow compared to Friday? Actually, low volume reflects weak hands. So, last week’s buyers were weak hands, and Monday’s sellers were strong hands.

Pattern points… (Setups and technicals)[pay]
Repeatedly bouncing back up to 1402.00 Monday chipped away at its resistance. Combined with absorbing the intraday dip to 1395.00, buyers had earned some probe of fresh session highs. They were rewarded by a last-minute surge up to 1405.00.

Closing in positive territory above 1405.00/1407.00 would have signaled automatically the correction from 1468.00 had ended. Instead, 1405.00 held as resistance. So, putting into play any higher objective would require forming a new accumulation pattern, and triggering it.Buyers still had some influence Monday. Their second consecutive close above 1397.00-1397.75 has marginalized sellers enough that immediately launching a new downleg isn’t likely. A new downleg would require forming a new distribution pattern, and triggering it.

So, trending Tuesday would require a second consecutive close to confirm. Otherwise, a pattern is still forming. But the burden of proof remains on buyers to produce another two consecutive closes above a relevant level. Sellers lost traction long ago, but the door remains open to them regaining it.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Other than an abnormally busy econ calendar, Tuesday has no particular challenge facing it, since there was no unfinished business left outstanding.[/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.