Trading Plan for 12/17

If Monday’s session-long rally had inverted… then at least the session would have trended. Instead, sideways ranging was unable to improve upon the open’s probe of three prior sessions’ highs. But no selling pressure was able to trigger more than a corrective dip.

Pattern points… (Setups and technicals)[pay]
Monday morning’s “session-long rally” setup was triggered by maintaining a gap open above Friday afternoon’s 1773.50 high. It wasn’t thwarted by also probing Thursday afternoon’s 1778.50 high, which maintained its recovery through the opening 15 minutes of volatility. The signal also wasn’t affected by testing the third prior afternoon’s high from Wednesday at 1785.00.

The signal wasn’t affected by expending so much energy so early. Post-open action held above the 1777.50 opening print. Sellers were marginalized.

That didn’t translate into extending higher, as would be suggested by being labeled a “session-long rally.” Only one timing window probed the prior timing window’s high. That was the afternoon’s bias environment, and its reaction down under 1781.00 put into play a probe under the 1777.50 opening print.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Whether tested overnight or post-open Tuesday, there is room down to 1773.50-1775.00 before suggesting that Monday’s 1786.25 high won’t be retested. Exiting any timing window any lower would essentially put into play a retest of Sunday night’s low, and closing above Monday’s high could marginalize sellers. Either scenario would last into Friday’s expiration, and so include Wednesday’s FOMC.[/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.