Trading Plan for 12/12

If one week of chipping away at resistance deserved a fresh high… does it necessarily deserve a second? Not when the second high would confirm a breakout. Since Tuesday’s rally was a breakout, a second consecutive higher close is a little less likely.

Pattern points… (Setups and technicals)[pay]
1433.00 has been included in our discussions for awhile. It would have been put into play by a fresh high close above last Monday’s 1424.00 Globex trend extreme. The only reason for it to become an objective would have been to encourage a second consecutive higher close, confirming a breakout targeting new highs.

1433.00 was also Tuesday’s renewed bias-up target. It was put into play above 1425.50, and it was tested. Now, since it has been touched already, a rally targeting new highs would require closing above 1433.00.

That might be difficult since its test reacted down 10 points. Its dip under 1425.50 was recovered back up above 1427.25, which held as resistance through the cash session close. The post close surge up to 1432.00 was otherwise irrelevant.

[/pay]What’s Next… (Outlook and opportunities)[pay]
When the afternoon drop was testing the 1423.75 opening gap,  I noted in the Chartroom that gaps up to fresh highs rarely accompany peaks, and even rarer do they reverse down in the same session. There is still a path down, but it requires greeting Wednesday afternoon’s FOMC meeting from under Tuesday’s range. [/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.