Trading Plan for 1/14

If one day”s price action can swing so widely… then another day”s price action can swing widely. It”s the “birds of a feather” rule. They tend to flock together. Friday”s approaching expiration is enhancing the volatility, and that influence isn”t likely to wane.

Pattern points… (Setups and technicals)
Tuesday morning”s rally put 2052.00 at risk of being recovered. Not holding  its test Thursday and Friday led to Monday morning”s drop. Not recovering its retest Tuesday led to the morning”s pullback — and Tuesday afternoon”s drop fell through the two tests” interim low. 

There”s no bearish reason to revisit 2052.00 again. Another retest at this stage would be likely to signal new highs in-play.

There was a bullish reason to revisit Monday”s 2015.25 low. So long as oversold RSIs there required a retest, a recovery attempt would be suspicious. Tuesday”s plunge retested 2015.25. Not by a little, and not briefly. Yet Tuesday”s close had recovered to overlap 2015.25.

The likelihood is for the decline to extend. Bouncing first isn”t likely, but bouncing first is likely to fail.

There is potential for a ”session-long decline” setup. Tuesday afternoon”s low printed during the bias environment, and closing action essentially trended up (it happened to hold a test of its 2022.00-2023.00 bounce limit). Gapping down Wednesday under Tuesday afternoon”s 2001.00 low would be likely to trend down through the close.

Somewhat similarly, a recovery could be signaled by immediately recovering 2029.00, if not also 2037.00. And that door is open only because Tuesday”s close was still overlapping Monday”s low. Oversold RSIs at Tuesday”s low make it unlikely.

What”s Next… (Outlook and opportunities)
My WedEX will trigger at Wednesday”s close. It forecasts possible bias into and out of expiration. I expect an active signal, not passive, which has a more aggressive resolution. We”ll discuss it during the afternoon as the signal begins forming.