Trading Plan for 1/14

Thursday’s inside day ended like Wednesday, with a last half-hour surge past the cash session close. Also after having dipped to test Wednesday’s 1277-1279 opening range. While RSIs diverged positively into that low. But there’s one interesting difference.[pay]

Pattern points… (Setups and technicals)
Sellers retaking control Thursday optimally would have broken below 1277.00-1279.00 through the open. Preferably no later than exiting the noon hour. The attraction pulled price down, but never pushed it down further.

The consequences aren’t bearish. But they’re not being bullish, either. Wednesday’s breakout above the prior range is not confirmed. A new high close Friday could try again, but Friday breakouts usually aren’t confirmed on Mondays.

So, what’s different about Thursday’s late surge? This one extended higher. Wednesday’s post-close extension added 2 points up to 1284.25. Overnight action from there was flat to lower. Thursday’s post-close extension also added 2 points. And then another 2 during INTC’s earnings call, so far back up to 1284.25.

Wednesday’s breakout made higher prices likely into the holiday weekend. Thursday’s open could have rejected it, maybe even the noon hour. They didn’t. Friday’s likely probe of higher highs wouldn’t necessarily close at higher highs. A probe of lower lows or reversal down is probably delayed until next week, but could still be started before the weekend.

What’s Next… (Outlook and opportunities)
Wednesday’s high is on a path to be probed Friday. Wednesday afternoon’s 1285.75 bias-up target remains unfinished business above. Exceeding it through a relevant timing window would next target essentially 1290.00 and 1303.00.

Thursday afternoon’s 1276.25 low printed during the last half-hour, so no gap down would trigger a session-long decline setup. But a break maintained under Thursday morning’s 1278.00 low can still trend down sharply to test 1270.00. [/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.