Trading Plan for 12/22

[pay]Pattern notes.
Friday’s intraday buyers had been fully absorbed after the open and close both held tests of 1098.00. The only way to extend higher was to gap up. Monday’s open did gap up, and then surged higher to test 1109.00 during the first half-hour. It was still being tested at the close, so buyers again gained no traction.

Unlike Friday’s session, all of the interim action took place above. Monday’s Trading Plan allowed for resolving up from Friday’s range. Resolving up Tuesday would require maintaining a gap up above Monday morning’s 1112.00 high.

Firming but not gapping up would be likely to hold a test of Monday’s highs, and resolve back down. Almost any weakness – whether sliding from the open or gapping down – would indicate that the sponsorship behind Monday morning’s rally had already disappeared (probably expiration related).

The greatest achievement of extending the rally won’t be to probe prior highs. Rather, it might not be much more than just preventing sellers from regaining traction before the 3-1/2 day holiday weekend. If sellers do gain traction Tuesday, exploiting the rubber band being stretched Monday morning, then a great deal of damage could be done by noon Wednesday.

Indicators and Internals.
RSIs created several attractions both higher and lower Monday, but none was left untested.

Tuesday’s opportunities.
News items aren’t very high-profile before Tuesday’s open, but they will be afterward. That’s going to keep the open fluid. Gapping up above Monday’s highs could extend higher at an hyperbolic slope if not pushed back down by 10:00. Almost any other scenario would leave price lower going into the noon hour. [/pay]