Trading Plan for 11/9

[pay]Pattern notes.
Friday’s opening dip was the week’s third sell-off attempt (all highlighted green on the chart below). Each reaction was increasingly determined, and increasingly brief. Monday’s intraday recovery inched its way higher into the close. Wednesday’s sell-off came last-minute, but its recovery was well underway by Thursday’s open. Friday’s sell-off and recovery lasted all of 90 minutes.

The three latest sessions probed the prior session’s high. No day since Monday has made a lower low. Each day last week ended higher. After Friday’s open made quick work of absorbing pre-open buyers, there would be only one excuse for extending higher – anxiousness ahead of the weekend. And that excuse disappears Monday.

The weekend’s impending illiquidity didn’t trigger a short-squeeze, which suggests that buyers aren’t overly-optimistic. Monday’s open might unleash that optimism with an opening rally. Friday’s optimism was somewhat ineffectual, its morning high not broken by the afternoon’s gains. An opening rally Monday would neutralize the ineffectual aspect of this optimism.

If it seems like much depends upon an opening rally, that’s because it probably does. A fourth sell-off could recover, and reverse into a rally, as well. Any setup that shows buyers either gaining traction or recovering would be bullish. Another dip unanswered would not.

Indicators and Internals.
Friday’s extremes were marked by 1-minute RSI being overbought or oversold, while 3-minute was not That, or oversold 1-minute and 3-minute RSI were making higher lows. There is essentially no unfinished business from Friday’s intraday technicals.

Monday’s opportunities.
An immediate rally Monday is possible, if not likely, in light of the discussion above. It would also be vulnerable to failure, as with the prior two Mondays (highlighted yellow on the chart). Reversing from higher highs to close down negative would not be bullish. Back under Friday afternoon’s 1062.00 low could see sellers pick up where they left off Friday. Gapping under 1062.00 would signal a session-long decline.

Just closing positive on the day would generally be bullish, subject to the character of price action above 1071.00. But the next higher corrective bounce target is 1083.00, and it will be in-play if buyers gain traction Monday. The econ calendar is dry – pretty much through Wednesday – so initial trending should be able to run.[/pay]