Trading Plan for 12/11

If the target triggered Tuesday weren”t tested so closely Wednesday… then Thursday would be sure to resume the decline, if not also extend it. Not that a bottom is any likelier to form in this area, but the near-term timing for extending down could have been clearer.

Pattern points… (Setups and technicals)
Like last week”s Euro setup, it”s fun to see several unrelated predictive influences play-out so quickly. The market”s setup formed faster and was fulfilled entirely the next day.Traversing a 38-point price range in that time is impressive, too.

So, Tuesday afternoon”s weak-handed buyers suffered the consequence of not only retracing their productivity, but also reversing it back through its prior low. The punitive damages, as it were.

The question is two-fold. First, were the punitive damages enough, probing under 10 points under 2033.25, avoiding 2022.25 by 4 ticks? And second, would that equate to being a bottom?

In either case, a third question is how high of a bounce could still be only a temporary bounce that still resolves down. That answer is 2041.50 or 2045.00. Which is a lot of room for a bounce.

Wednesday”s decline did gain traction for its efforts — the bias environment was exited under the noon hour”s low, and the final hour was entered still lower. Unless Thursday”s open were to gap up above a prior high, fresh lows should be probed intraday regardless of the answers to my first two questions.

What”s Next… (Outlook and opportunities)
Wednesday”s close under Tuesday”s low accomplished what Tuesday”s drop did not — triggering a trend change signal by closing under last Monday”s 2048.00 low. Now, just not recovering it Thursday would confirm the signal. So would already extending the decline.