Trading Plan for 12/22

Sound and fury… signifying almost nothing. Tuesday’s overnight surge to 1249.00, and Wednesday’s drop to 1223.00, each probed interesting territory. But the afternoon’s recovery back up to Tuesday’s 1237.00 highs was still being tested at the close. Once again, neither buyers nor sellers gained traction for their efforts.

Pattern points… (Setups and technicals)[pay]
Neither buyers nor sellers gained traction for their efforts. The big difference in this regard between Tuesday and Wednesday was that sellers never really tried. Oh, sure, Tuesday’s late blip under 1233.75 did trap some shorts. But its reaction up ultimately trapped longs at session highs.

So, once again, there is no requirement to trend either up or down. Trending in either direction is likely to begin by gapping. And regardless of how it were to originate, a trending attempt’s minimum objective would be to test the 1249.00 prior high or 1223.00 prior low.

Gapping down far enough could be even more bearish. Since Wednesday’s closing action trended up, gapping down under the afternoon bias environment’s 1227.00 low would trigger a session-long decline.

[/pay]What’s Next… (Outlook and opportunities)[pay]
Regardless, breaks under 1225.00 and  1221.00 through relevant timing windows are needed for signaling that momentum has actually reversed down. There is no requirement for the balance of the week to produce any more substantial trending, as Monday’s impatient surge is inhibiting a more substantial Christmas rally.[/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.