Trading Plan for 1/16

If Tuesday’s close had been a fresh high… instead of dipping, then a hold-long setup would have triggered. Only that late dip prevented its consideration. That’s because it also prevented a breakout. Apart from that, fresh highs would be credible for extending higher.

Pattern points… (Setups and technicals)[pay]
Were buyers being patient since Friday morning, hovering under the ~1471.25 overnight highs without reversing down? Sellers were not exploiting this hesitation, so they were considered “ineffectual” until proved otherwise.

That proof otherwise needed to be a break lower Tuesday. Any further delay would all but ensure extending the rally. Sellers did break lower Tuesday. But worse than not exploiting hesitant buyers, they did, and they failed.

The reward to invalidating the morning’s late bias-down was to fulfill the no-bias parameter, and to test the 1467.75 bias-up signal. That was fulfilled Tuesday afternoon up to 1468.25. The consequence to not letting (ultimately) sellers gain traction was to attack the ~1471.25 overnight highs, if not also probe higher to test 1474.25.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Back under 1463.50 would start to signal that sellers were attempting again to take control. Meanwhile, higher highs are likely, but not required. And since Tuesday’s probe above Friday and Monday’s highs did not close higher, higher highs are unlikely to trend up into a new upleg. [/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.