Trading Plan for 1/13
If Thursday’s pre-open high didn’t require a retest… then retesting it post-open Friday would have trended up into the weekend. Testing it intraday Monday could still be bullish. But there is otherwise no requirement outstanding to test recent highs.
Pattern points… (Setups and technicals)[pay]
Intraday on Friday’s blog, I described that extending the decline under the morning’s 1827.00 objective would have been credible for launching a new downleg. It just had to break before entering the noon hour. Coming out of the noon hour would still be plausible, but less credible. Any later could have extended, but would have been retraced.
The point is that Friday afternoons are not dominated by strong hands. So, whichever direction breaks late is sponsored by weak hands. Strong-handed sellers would have broken 1827.00 early, and weak-handed sellers would have sponsored a later break.
Instead, there was a rally. Barely firming into a narrow range hovered in negative territory until the final hour, and THEN broke higher. Unless that effort recovered a relevant level, its buyers are the weak hands — not sellers.
So, did that effort recover a relevant level? It did, but it didn’t. The relevant level is 1836.00-1836.50. That late break higher reached it with 45 minutes to spare. But those last 45 minutes were spent ranging around 1836.50, instead of extending above it, happening to settle several ticks above it, but still within the range.
If buyers are weak-handed, then sellers must be in control coming out of Monday morning’s bias environment, or earlier. There should be negligible hesitation at 1827.00, having chipped away at its support. Probing higher highs first should be contained to 1841.00 if the afternoon doesn’t intend to extend to fresh highs.
[/pay]What’s Next… (Outlook and opportunities)[pay]
Iiiit’s baaaaaack… Having been on break for two weeks, the Saturday Strategy Session returns this weekend at 9:30am ET. We’ll discuss Sunday night and Monday night possible price action, and the bigger picture objectives in either direction. Also, attendees can request analysis of any chart.[/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.