Trading Plan for 11/4

[pay]Pattern notes.
Monday was the third consecutive session to trade at least partially within last Wednesday’s range. It was also the third consecutive session not to close above last Wednesday’s ESz 971’50 high.

The relatively narrow session doesn’t offer any other new clues, except that it was a relatively narrow session. A trending session might have quite normally emerged sometime Monday. Now the further delay makes trending likely to begin by gapping.

I was surprised at the paralyzing effect of anxiousness on Monday’s price action. Continuing this behavior ahead of this evening’s election results would not be surprising. A gap at Wednesday’s open would be almost unavoidable, but the real fun will be in the chartroom Tuesday overnight.

Indicators and Internals.
Internals diverged negatively Monday when 25% more NYSE up volume than down volume produced 5% fewer advancing issues than decliners. This isn’t a sell signal, but it does reveal deterioration beneath the surface that would undermine a rally attempt, and enhance a sell-off attempt.

Tuesday’s opportunities.
Two weekly retail sales reports are due pre-open, then Factory orders at 10:00. Exit polls leaking out might provide some intraday opportunities. An overnight break under 963’00 might already put the market on defense before having any serious news to process and absorb. Similarly, an opening break above 971’50 would soon prove whether the current trading range has expended too much buying energy just to tread water.[/pay]