Trading Plan for 12/10

If Tuesday”s open had gapped down only to test its target… then would sellers have controlled the balance of the day? Probably not — timing windows do what they”re going to do. But the morning would have been more vulnerable to trending down, so the afternoon”s bounce would have been less likely to retrace all of the morning”s drop. And now buyers have expended all available energy just to test resistance.

Pattern points… (Setups and technicals)
Tuesday afternoon”s recovery filled the gap back to Monday”s 2060.50 close, and held. By not closing above it, the next higher target wasn”t put into play. We already knew the last leg up was sponsored by weak hands, since it began after the 3:10-3:20 timing window, and from under the bias environment”s highs.

The gap to Tuesday”s 2039.00 open is a different story. The morning overlapped it multiple times. Rallying out of that range didn”t begin until halfway through the noon hour — also a product of weak hands.

Obviously, weak-handed sponsorship doesn”t preclude trending. It just makes trending vulnerable to failing spectacularly if it trends anyway. And this weak-handed trending has extended.

What”s Next… (Outlook and opportunities)
Room for noise above Tuesday”s high to 2064.00 could be tested overnight and already react down before Wednesday”s open. But exiting Wednesday”s open above 2064.00 would be likely to extend higher Wednesday morning regardless of the downside vulnerability