Trading Plan for 11/30

Overnight highs were left untouched… Not that they required being tested, but they weren’t rejected. The market tends to retest them if not rejected immediately. Or, if not rejected much more substantially the following day.

Pattern points… (Setups and technicals)[pay]
Tuesday session went out testing 1194.00 support. So had the afternoon’s bias environment, which also went out testing 1194.00 support. And positive territory was maintained.

Breaking under 1194.00 at this stage of this pattern would be rewarded by collapsing prices through Wednesday’s open. If the whole point of the exercise was to chip away at 1194.00‘s support, then Wednesday’s open should already be in the process of breaking lower.

So, not already breaking lower at Wednesday’s open would be likelier to retest the 1205.00-1206.00 overnight highs. An entire session developed without testing it, but also without rejecting it by closing under a prior low. Immediate strength at Wednesday’s open would be credible for completing the retest, perhaps even extending higher.

Otherwise, breaking lower — under 1189.00-1190.00, then quickly extending under 1186.00 — would begin a relatively quick process of retesting the 1147.50 Thanksgiving lows.

[/pay]What’s Next… (Outlook and opportunities)[pay]
I noted in the Market Tour that the overnight highs were likely to be retested since they still weren’t rejected by the close. A post-close 8-point slide to 1189.00 (reacting to downgrades) is threatening to tumble anyway. Considering the extra dip, opening firmer would find buyers extra refueled for a rally.[/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.