Trading Plan for 12/1

Those central banks steal all the fun… The recovery potential up to 1206.00 and to 1213.50 was overshadowed by the intervention’s reaction up to almost 1240.00. That borrowed heavily against future buying pressure, requiring a couple of dips to 1232.50 before resuming the rally up to 1246.00.

Pattern points… (Setups and technicals)[pay]
That pretty much explains it all. Tuesday’s pullbacks had held support, allowing an overnight dip to be absorbed and reversed up sharply – even without the intervention. Wednesday’s pullbacks also held support the post-open dip and the afternoon’s pullback — and didn’t wait until the close before reversing up sharply.

There is a price to not letting the buying pressure become pent-up overnight — it is fulfilled intraday. Potential up to 1245.50 was met in Wednesday’s final minutes. It was probed up to almost 1247.00 before reacting down to 1243.00.

Still testing resistance instead of closing above it fulfills its attraction without putting higher highs into play. Closing below it without first testing it would have left outstanding its attraction above. Thursday’s open has the benefit of neither.  Trending away from 1245.50 overnight would be likely to reverse back in the opposite direction.

[/pay]What’s Next… (Outlook and opportunities)[pay]
There is one exception to overnight trending not gaining traction —  and that is gapping down under the afternoon’s 1232.50 low to trigger a session-long decline. Otherwise, pre-open and post-open news will produce choppiness, but relatively predictable outcomes.[/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.