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Trading Plan for 12/19 – If, Then… Market Timing

Trading Plan for 12/19

By Rod David | December 18, 2014 - 5:04 pm

If fresh highs are probed already… then what sponsorship will be available to defend against reactions down?

Pattern points… (Setups and technicals)
Not that there was much thought of getting there Thursday, but the next highest calculable resistance above the 2030.00 area was 2050.50. That”s the room for noise above 2047.50, its lower-end being the afternoon”s 2046.50 bias-up target. The rally tested that range”s upper-end into the position-squaring window.

And then the rally extended. 

The next higher resistance isn”t so much a calculation of buying pressure, but a retracement back into Thanksgiving week”s 2066.00 pivotal high. That”s the high prior to the next week”s higher high, represented by proxy at 2056.50. Recovering it often extends to test the actual high, sort of like testing a pivotal high. It was exceeded by more than 6 points, but not decisively since it wasn”t even touched before coming within 3 minutes of Thursday”s cash session close.

And that”s from an unstable base — Thursday afternoon”s late breakout after the bias environment exit and final hour entry had failed to gain traction. The correction template could still prevent a new high. The abrupt price change since Wednesday”s close might already fulfill the bullish WedEX so that it can invert back down. Either Thursday”s high has fulfilled the upside, or a fresh high is targeting 2074.50.

What”s Next… (Outlook and opportunities)
Having trended up into Thursday”s close, gapping down Friday under Thursday afternoon”s 2037.50 bias environment low could form a “session-long decline.” That”s only 17 points. Just gapping down under 2050.50 would undermine the rally”s momentum. Since Thursday”s rally gained no traction for its effort, extending higher without delay must gap up through 2062.00 and preferably also 2067.00. Meanwhile, being a Friday, the morning”s bias should persist through the noon hour. And being an expiration session, trending through the opening 15 minutes of volatility could extend in that direction throughout the day.

Posted in Market Wrap, S&P