Trading Plan for 12/14

If the market intends to insert a downleg before Christmas… then there it should exploit the next opportunity. The next one won’t come along until too close to the holiday’s seasonal bullishness.

Pattern points… (Setups and technicals)[pay]
Thursday’s extended intraday decline fell back under the 1412.00-1416.00 prior lows for the first time since Tuesday, when its open gapped up above them. So, it was the first opportunity for a bounce from under prior highs to fill Tuesday’s 1417.25 opening gap up.

More interesting is where that opportunity appeared. The afternoon’s 1412.00 bias-down target was already met, and already retested. Trending down to a fresh low at 1410.00 prevented trending up above a prior high at 1414.50. Any bounce would be too late to be anything but a temporary correction.

The afternoon’s bottom did launch a bounce which came close enough (to within 1 tick and within the opening gap’s structure). It has been retraced already back to its 1411.00 origin. Overbought RSIs at 1417.00 may want a retest, which might be exceeded momentarily. But sellers otherwise need no further refueling before extending down to 1404.00 and 1395.00.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Just avoiding an open under Thursday’s 1410.00 low would make another bounce likely to test 1417.25 more thoroughly, if not more substantially like up to 1421.25. [/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.