Trading Plan for 12/19

If Tuesday’s fresh high close isn’t invalidated immediately… then an upleg targeting new highs is underway. If Tuesday’s close isn’t confirmed immediately, then an upleg would still be questionable, at least for now.

Pattern points… (Setups and technicals)[pay]
Tuesday afternoon was similar to Monday. They shared what each other lacked. Neither offered any bullish indication in exiting the bias environment, entering the final hour, or through the 3:10-3:20 window. They were also similar in being attracted back up to the session high, despite lacking any bullish indication.

One big difference is that Tuesday’s held a test of its intraday high, and even reacted down. Monday’s late recovery extended sharply higher.

There is still upside potential from the afternoon’s 1444.50 bias-up target. It became unfinished business above, despite the bias environment dipping back to the 1438.00 bias-up signal. But the signal was triggered decisively at 1:20, so not rejecting it decisively left it in-play.

The dip back down to 1438.50 had avoided breaking under 1436.50, which avoided signaling a top had formed. A top is unlikely after closing above last week’s 1432.50 high, unless the close were rejected immediately by proxy Wednesday.

[/pay]What’s Next… (Outlook and opportunities)[pay]
The range of noise around last week’s 1432.50 high extends up to 1436.50. Gapping down to and through it Wednesday — and preferably also above 1434.00 — would be a good start at rejecting Tuesday’s fresh highs. But the rejection would also need to extend down sharply. Any shallower or less aggressive selling would be likelier to recover, and a firm open would be likely to extend higher.[/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.