Trading Plan for 1/16

If Thursday delays probing Wednesday’s high… then the recovery has a problem.

Pattern points… (Setups and technicals)[pay]
First, WedEX triggered an actively bullish signal. Price action into and out of expiration should be biased upward. That’s Friday afternoon and Tuesday morning. An interim dip is possible, not abnormal, and likely to be recovered.

Second, dipping at Thursday’s open would be too soon to be “interim.” And it is possible. Normally, it would not be recovered. The bullish WedEX would be negated by proxy.

Had Wednesday’s session trended upward, then Thursday’s open probably wouldn’t dip down so far that it negates the bullish WedEX. But Wednesday’s upward trending was limited to the morning’s bias environment. No other window joined it. Sliding through the open back under Wednesday’s 1840.50 lows could invalidate whatever upside had been signaled.

Extending higher without delay would be helpful confirmation to expiration’s upward bias. While ranging sideways 1840.50-1844.50 through Thursday morning wouldn’t invalidate the bullish WedEX, it would be extra vulnerable to an afternoon drop, perhaps into Friday morning — likely to be recovered, but down in the interim.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Thursday’s session is full of economic reports and events that, if absorbed, would make Wednesday’s breakout stronger. At least, not reversing down on Thursday morning’s items would imply the rally is on a mission, and its 1856.50 would be tested much sooner rather than later.[/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.