Trading Plan for 1/22

If Tuesday’s open were any lower… then the session might have rallied 18 points instead of dropping as many. But that would have tested the next higher target, which probably won’t be rejected immediately upon touching it. So, dipping first may have bought the rally a little more time — assuming that it resumes Wednesday.

Pattern points… (Setups and technicals)[pay]
The small Double Top at Tuesday’s 1844.00 high should be probed by new highs eventually. Tuesday afternoon’s consolidation at its 1837.25 bias-up target chipped away at resistance, keeping the door open to probing new highs.

The trick is to not look down. While hovering at resistance — and chipping away at it — all but requires breaking through, closing first keeps the door open to a corrective dip, first. The trick to dipping first is to keep it brief. The better trick would be just to extend higher without delay.

Exiting Wednesday’s open trending down under Tuesday afternoon’s consolidation would be a problem for probing fresh highs this week. Tuesday’s lows already pushed the edge of the envelope, and will need to be retested eventually. But there’s not much support any lower to force a recovery.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Don’t forget that econ reports don’t have any real influence this week except for Thursday. That leaves earnings news able to have more impact. That impact can be inhibitive, like preventing trending, as much as it can trigger volatility. [/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.