Trading Plan for 1/13

If Monday morning”s decline had extended through the close… then any attempt to recover would be doomed to failure. At least a recovery attempt from Monday”s actual pattern could succeed if it included a probe of fresh lows. But even then, no requirement is recovered.

Pattern points… (Setups and technicals)
It too all day, but oversold RSIs at Monday”s 2015.25 low were finally attacked. But still not retested. 

A difference of 2 ticks remained outstanding when the position-squaring window opened at 3:37. Its reaction up to 2026.50 reacted back down 6 points into the close.

Exiting the bias environment under noon hour would have been bearish if the final hour weren”t entered higher. That doesn”t preclude probing fresh lows, but it makes them likely to recover.

Since retesting Monday”s 2015.25 low should include 2013.00, dipping overnight could already be in recovery mode at Tuesday”s open. Waiting until the open before probing a fresh low would be dangerous, but still recoverable if done abruptly.

There is no requirement to recover. Declining since Thursday”s test of 2052.00 is entirely in-line with that being the corrective bounce”s peak. Rallying prematurely overnight — not first neutralizing the nearby attraction below — would be considered a detour on the way to new lows.

What”s Next… (Outlook and opportunities)
AA kicked-off the quarterly earnings onslaught after Monday”s close. And econ reports start picking up again. Keep in mind the market”s reaction to one news item might be retraced entirely and abruptly by the reaction to another news item.