Trading Plan for 12/17

Lower-end, meet upper-end… Upper-end, meet lower-end? Wednesday’s signal established 1230.00 as support, and 1243.00 as resistance. If resistance were met during expiration, would it push price back down?[pay]

Pattern points… (Setups and technicals)
Patient buyers controlled Thursday afternoon. The afternoon’s 1237.50 bias-up signal had extended only 2 points more to 1239.25. And it was probed by 2 points as support down to 1235.50 when the bias environment lapsed.

Patient buyers controlled Thursday’s close, too. A short-squeeze could have exploded higher to new session highs if 1238.00 were recovered by 3:50. But waiting until 3:55 restrained buyers, preventing a test of the afternoon’s 1239.25 high.

1243.00 can be tested overnight, but it is not a sell signal. It can be tested and rejected overnight. It can be tested and not rejected. Its test would fulfill a lot of buying pressure, but it would not necessarily attract selling pressure. A reaction would have room down to 1238.75 just as noise.

Reversing from 1243.00 to close under 1237.00 would signal momentum reversing down. A pullback has room down to 1230.00 before 1243.00‘s attraction became moot. A dip is not likely since Wednesday’s close under Monday’s 1235.25 low was invalidated Thursday. But expiration can be a wild card, and 1233.00 could be visited.

What’s Next… (Outlook and opportunities)
Thursday’s closing price action was a rare setup that accepted holding long through the close. Patient buyers didn’t probe the session’s 1239.25 where they might have been rejected and lost traction. (Futures did, but that was too late to be predictive.) Probing 1243.00 overnight might form a “new Globex trend extreme” requiring intraday retest. But a dip has room to 1233.00 or even 1230.00 before sellers might gain traction.[/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.