Trading Plan for 12/17

If a Christmas rally wants to form from lower levels… then those lower levels will probably need to be met Monday and/or Tuesday, or else there might not be sufficient time to absorb and recover a later dip.

Pattern points… (Setups and technicals)[pay]
1412.00 resistance was tested by a lot of bounces Friday. Almost any accumulation pattern could have leveraged all that chipping away at resistance, whether to launch a rally or only a short-squeeze. But there was never any accumulative action, so no buy signal was ever identified.

Anyway, the morning’s unfinished business below at its 1404.25 bias-down target remained outstanding. And the session had been chipping away at 1409.00 support — while also forming a distribution pattern. Guess which way the market broke.

Sellers gained traction for their efforts — Friday’s close was still testing the morning’s lows, but it was under the noon hour’s lows and no prior high was recovered. So long as Monday doesn’t recover 1412.00 immediately or after fulfilling 1404.25, this downleg would next target 1397.75, and could extend to 1391.00-1392.00.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Don’t forget to join us this weekend for the Saturday Strategy Session at 9:30am ET. Its link is found in the blog’s sidebar… Also, this Thursday will be our “January Effect” discussion. Its start time is tentatively scheduled for 7:00pm ET. [/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.