Trading Plan for 11/28

Friday’s thinly traded session… didn’t prevent a very early, very steep, and very substantial trending attempt. It might have prevented maintaining the attempt, which was retraced almost entirely.

Pattern points… (Setups and technicals)[pay]
Is there any escaping a visit to 1142.00? It was put into play by closing Wednesday under 1166.00, and now confirmed by a second consecutive lower close. It was attacked to within 5-1/2 points at 1147.50 before Friday’s open. A 24-point interim rally was largely retraced just to stay within striking distance of 1142.00.

The 1147.50 overnight low is a “new Globex trend extreme” that requires being tested intraday. Gapping up above the 1159.00 last relative high robbed sellers of their traction, but too much buying pressure was expended too quickly to be maintained. It took until the cash session’s last minute, but 1159.00 was finally retraced.

It’s possible that post-close sellers are now the ones to have expended too much energy to be sustained. The post-close break visited 1149.25. The hour before the close was spent entirely ranging around 1161.00 support. Gapping open above 1166.00 would suggest the late selling had been absorbed.

Otherwise, immediately breaking under 1153.00 through Monday’s open would be likely not only to retest 1147.50, but also to visit 1142.00. Delaying a recovery from there would find little chance of durable support before attacking 1111.00.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Whether by gapping up enough, or by quickly printing and recovering from a low enough low, Monday has potential to end the decline. But almost any delay in either a rally gaining traction, or in the decline losing traction, would suggest much bigger selling pressure on its way.[/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.