Trading Plan for 12/19

[pay]Pattern notes.
At noon Thursday I was excited to have identified at least 13 points in three moves. Equilibrium was signaled at Wednesday’s close, so little more than ranging was likely, and nothing more than ranging had appeared. Then a pattern identified a 7-point drop to new session lows. A normal equilibrium session would have produced a 20-point reversal back up to new session highs.

This equilibrium session produced an extra 20-point drop. It was retraced by price action into the close. Sellers would have retained control had the close been under 877’50-880’00. But there was room for a bounce up to 890’00 before buyers would even begin to regain control. S&Ps printed 883’00 when the cash session closed, and gained 9 points more before the Globex open.

A gap open under 877’50 or some similar feat would resume Thursday afternoon’s decline. There is no unfinished business above, but plenty below: last Friday’s gap down at 849’00, and that morning’s 828’75 new Globex trend extreme. For starters. If the equilibrium bleeds into Friday’s quadruple expiration, then back above 897’50 could immunize the balance of the session from sellers.
Indicators and Internals.
Three times more NYSE down volume than up volume Thursday produced only one-third more declining issues than advancers. Buyers were more productive than sellers, which tends to be rewarded by some sort of gain the following day, perhaps only briefly. Technicals left no requirements at all, with 3-minute RSI only momentarily leaving its complacency zone during Thursday’s last-minute surge.

Friday’s opportunities.
Expiration sessions aren’t generally volatile. And equilibrium session tend not to trend successfully. If Thursday’s participants could break the mold, Friday’s might also. [/pay]